BRITANNIA Building Society has said it is “committed” to North Staffordshire after moves to create a “super-mutual” from a merger with the Co-op’s financial services arm were revealed.

Leek-based Britannia, which employs 2,000 people in the area, is exploring a tie-up that would form a business with more than six million customers and £70 billion of assets.

Both sides have stressed that talks were at an early stage and part of wider discussions about how they could work together.

Britannia chief executive Neville Richardson said it was too early to comment about the impact on customers and staff.

But he added: “We can say that we remain committed to our Leek base, our extensive branch network and our strong Britannia brand.”

The proposals could come to nothing or result in the two co-operating on the supply of specific products and services.

It is not clear whether Britannia’s three million members would receive a windfall payment as part of any merger with the Co-op.

In a statement yesterday, Mr Richardson revealed the two organisations were considering an outright merger.

He said: “Both businesses have been pursuing successful strategies and don’t need to merge, but we recognise we could be even more successful by coming together and creating the UK’s most trusted financial services business.

“Talks are at an early stage and no decisions have been taken, so it’s too soon to talk about what changes might arise for our customers and employees.”

Britannia, which employs 2,000 people in Leek and almost 5,000 people nationally, has, like most financial organisations, been hit by the credit crunch and the economic downturn.

It posted pre-tax profits of £50.5 million for the six months to July this year, compared with £81 million last year.

Mortgage lending fell almost £2 billion over the same period to £1.9 billion.

But analysts believe both Britannia and CFS, the financial services arm of the Co-op, are strong, and bosses said the merger had nothing to do with the current global financial crisis which has seen banks collapse or bailed out by governments.

They said they are talking to each other now because a law is expected to be passed early next year which, for the first time, will allow mutuals to merge with co-operatives.

A merger would create an organisation with assets of about £75 billion.

Any merger would have to be approved in a vote by Britannia’s members.

Britannia’s branch network would offer a platform for distributing Co-op bank accounts and promoting Smile, its internet banking service.

Mr Richardson added: “As two like-minded, forward-thinking and financially strong mutuals, we’re talking with CFS about how we can work together to create an exciting proposition for our members.”

Manchester-based CFS, which is part of the Co-operative Group, includes The Co-operative Insurance and The Co-operative Bank including Smile.

The Co-operative bank offers current accounts, savings accounts, credit cards and loans.

The Co-operative Insurance offers a variety of insurance products and The Co-operative Investments supplies products including unit trusts, investments bonds and pensions.

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