Co-operative Bank in merger talks with Coventry Building Society

Talks with hedge fund owners could return ethical bank to its mutual roots and create high street challenger with 5m customers

Coventry Building Society is in exclusive talks to potentially buy the Co-operative Bank from its hedge fund owners, in a move that would return the ethical bank to member ownership and create a high street challenger with nearly 5 million customers.

It signals the most serious sign yet that the Co-operative Bank’s hedge fund owners could exit the bank, after spending £700m on rescuing it in 2017.