BRITANNIA, the country’s second-largest building society, is talking to the Co-op’s financial services arm about creating a “super-mutual”.

This would create one of the largest financial groups in Britain with about £75 billion in assets, 13,000 employees and more than 6m members.

However, a merger would only be possible if the Butterfill bill passes through Parliament early next year.

The bill, sponsored by Sir John Butterfill, the Conservative MP, proposes to remove the current legislation that prohibits mergers between mutuals and co-operatives.

A spokesman for Britannia said last night: “We are in early exploratory talks with the Co-op financial services about how we might work together.

“They may or may not lead to a merger but the important point is that a merger is not possible under current law.

“However, the Butterfill Bill will enable much closer working collaboration between the different mutuals — in anticipation of that we are talking.”

The deal could lead to the disappearance of Britannia as the Co-op’s bank accounts — including its internet service Smile — would most likely be distributed.

It is unclear whether customers of either firm would receive a windfall.

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