A merger with Shawbrook, which has a large base of small business customers, and also caters to real estate agents and consumers, would create a combined bank valued at £3.5bn, Sky News reported, with the former mutual accounting for around 29pc of the business. The specialist lender was founded in 2011 and is currently owned by private equity firms including British funds BC Partners and Pollen Street Capital.
The Co-operative Bank’s owners are considering a wider auction of the asset. Other possible suitors include OneSavings Bank, Aldermore and Paragon.
The combination, should it go ahead, would follow the takeover of the UK arm of Silicon Valley Bank by HSBC earlier this year, after a run on the technology-focused US lender, and the forced sale of crisis-ridden Credit Suisse to rival UBS in June.
Following the loss of its mutual status, customers of the Co-operative Bank have pushed its new owners for a return to some kind of cooperative ownership.
Campaigners at Save Our Bank, who are long-standing customers, said earlier this year they hoped to “build a co-operative stake in the bank”.
The activists have also pushed for clear ethical policies at the bank, with The Co-operative Bank updating its commitments in 2022.
A Co-operative Bank spokesman said it did not comment on speculation. Shawbrook did not respond to a request for comment.
