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Debt Consolidation Loans

Brittania Co-Op Merger

Britannia Building Society and Co-operative Financial Services (CFS) have agreed to merge to create a new “super-mutual”. But what does this mean for the two society’s nine million members and 12,000 employees? Who will own whom? The new business will be a subsidiary of The Co-operative Group and Britannia members will become Co-op members. The integration is expected to take up to three years to complete.

However, the new business will continue to trade under the Britannia and Co-operative brands, as well as the Smile internet bank. Customers will see no immediate change to the products and services they receive. Related Links Britannia explores merger deal with Co-Op Q&A: Barnsley Building Society Will there be any branch closures? Probably. The mutuals say they will continue to have a significant presence in Leeds and Manchester, and combining the two branch networks will increase the number of branches to more than 300. However, where there are two branches in the same town, these may be merged. Will there be any redundancies? There will be no compulsory redundancies among branch staff - however, there may be redundancies amongst other types of staff.

The Co-op said: “It is expected that there will be some reduction in roles during the three-year integration process… Any compulsory redundancies will be kept to a minimum through redeployment, retraining and normal staff turnover over the three-year timeframe.” I am a saver. Will I still be protected by the Financial Services Compensation Scheme for both societies? Yes. The Financial Services Authority (FSA) has confirmed that savers who have accounts with both organisations will retain their £50,000 protection with both businesses under the Financial Services Compensation Scheme. I have a mortgage with one of the societies – how does this affect me? You will not see any immediate change. The Co-op says it will keep all customers on their current rates, including those on a standard variable rate (SVR) mortgage.

However, the Co-op also said that it “will move quickly to a single product range once the necessary integration of customer systems is complete” – suggesting that some customers may see a change to their rates once the merger is complete. However, Britannia’s SVR is currently 4.99 per cent and the Co-op’s is currently 4.74 per cent – so even if Britannia SVR mortgage customers were transferred today, it would be good news for these borrowers. Those on a fixed rate mortgage – or with fixed rate savings – are always guaranteed that rate until their deal expires. When will the merger be complete?

It is all subject to various approvals. Details are expected to be sent to Britannia members in March, and they will be asked to endorse the proposals at a general meeting, expected to be held on April 29. The merger is then expected to become effective in the summer, subject to confirmation by the FSA. Will members continue to share profits? Yes. Currently Britannia members benefit from the Membership Reward scheme. After the merger, they will instead join the The Co-operative Group's reward scheme, which includes dividends to members. Britannia says it expects to see "increased member dividends" as a result of the new "super-mutual."