Coventry BS bids for the Co-op Bank

wmb194

WillPS said:

wmb194 said:

WillPS said:

wmb194 said:

WillPS said:

jackjones01 said:

How will it work with one being a bank and the other being a building Society. Will they still operate separately or will the co op get rebranded Coventry Building Society 🤷🏽

It's an interesting point. I suspect that Co-op Bank will cease any activity deemed incompatible with being part of a building society, although I can't think what that would be - it's unusual for a building society to offer credit cards and current accounts but of course Nationwide does both.

There is no proposal to demutualise Coventry Building Society that I'm aware of. Whether the two entities are merged, or kept separate, or rebranded under something else entirely will be interesting to follow.

Have a look at the Building Societies Act: it places all sorts of restrictions on how they operate and how they must fund themselves, essentially mostly home mortgages and funded by, IIRC, at least 50% retail deposits.

It could just end up being a bank that's owned by a building society.

Feels like rather a large loophole if that's possible. What would stop any other building society from setting up a subsidiary bank?

You'd have a harder time extracting merger cost savings but if they're separately capitalised entities I doubt it would a problem. The Co-op Group used to own a bank, Tesco owns a bank... Building societies have been known to have subsidiary companies e.g., Newcastle BS has its outsourcing business.

Businesses, even consumer co-operatives, are not bound by legislature as to how they lend in the same way that Building Societies specifically are tho. Newcastle Strategic Solutions is a SaaS platform, not a bank or even a lender.

Yes, I realise, but my point is that legal entities of one sort can and do own legal entities bound by restrictions of other sorts.

EarthBoy

Building Societies have owned banks in the past, although not in recent years.

The Halifax Equitable Building Society created the Halifax Equitable Bank in 1900, but sold it in 1927 when they decided that banking was no longer for them.  Not to be outdone, their rivals, the Halifax Permanent Building Society, set up the Halifax and District Permanent Banking Co in 1910, but they'd had enough after seven years, and sold it off in 1917.  

IanManc

EarthBoy said:

Building Societies have owned banks in the past, although not in recent years.

The former Manchester Building Society owned Whiteaway Laidlaw Bank, which it bought in 2007 from Home Retail Group, and sold it in January 2011.

Whiteaway Laidlaw Bank was renamed Shawbrook Bank in October 2011.

WillPS

Interesting stuff, thanks for the info. I guess we'll see.

stclair

Hopefully if it goes ahead the coventry building society will bring out a current account. In addition I wonder if they’d keep the smile brand. 

Zanderman

stclair said:

Hopefully if it goes ahead the coventry building society will bring out a current account. In addition I wonder if they’d keep the smile brand. 

If it goes ahead Coventry won't need to bring out a current account, as they'll own a bank that already offers them.

As for Smile, I'm amazed it still exists as a separate brand - we've had our main joint account with Smile for ages, but the original USP, of being an 'online' bank, has been long lost, as all banks are online, and it now seems a forgotten brand, apart from to those of us with an account.

I would suspect it's probably had its day and could be merged back into Coop (or whatever Coventry go for) branding. 

gsmh

It's interesting that Santander kept it's online bank, Cahoot, open too - and now Cahoot is offering savings products which don't dilute the main bank brand. Maybe the Co-op will do something similar. 

wmb194

Zanderman said:

stclair said:

Hopefully if it goes ahead the coventry building society will bring out a current account. In addition I wonder if they’d keep the smile brand. 

If it goes ahead Coventry won't need to bring out a current account, as they'll own a bank that already offers them.

As for Smile, I'm amazed it still exists as a separate brand - we've had our main joint account with Smile for ages, but the original USP, of being an 'online' bank, has been long lost, as all banks are online, and it now seems a forgotten brand, apart from to those of us with an account.

I would suspect it's probably had its day and could be merged back into Coop (or whatever Coventry go for) branding. 

For a few years following the merger Co-op Bank used the Britannia brand for a few savings products so that could make a comeback. Dropping the Co-op brand would probably save it some royalty fees.

stclair

Zanderman said:

stclair said:

Hopefully if it goes ahead the coventry building society will bring out a current account. In addition I wonder if they’d keep the smile brand. 

If it goes ahead Coventry won't need to bring out a current account, as they'll own a bank that already offers them.

As for Smile, I'm amazed it still exists as a separate brand - we've had our main joint account with Smile for ages, but the original USP, of being an 'online' bank, has been long lost, as all banks are online, and it now seems a forgotten brand, apart from to those of us with an account.

I would suspect it's probably had its day and could be merged back into Coop (or whatever Coventry go for) branding. 

I suspect they’ll try and be the next nationwide. 

WillPS

stclair said:

Zanderman said:

stclair said:

Hopefully if it goes ahead the coventry building society will bring out a current account. In addition I wonder if they’d keep the smile brand. 

If it goes ahead Coventry won't need to bring out a current account, as they'll own a bank that already offers them.

As for Smile, I'm amazed it still exists as a separate brand - we've had our main joint account with Smile for ages, but the original USP, of being an 'online' bank, has been long lost, as all banks are online, and it now seems a forgotten brand, apart from to those of us with an account.

I would suspect it's probably had its day and could be merged back into Coop (or whatever Coventry go for) branding. 

I suspect they’ll try and be the next nationwide. 

This is also my assumption. 

I actually think the 'smile' brand is more likely to be retained than the 'co-op bank' one.