Coventry Building Society swimming with 'sharks' as it refuses to reveal why £780m bid for Co-op Bank won't go to member vote

Coventry Building Society has said it is swimming with ‘sharks’ as it refuses to reveal why its £780 million bid for Co-op Bank won’t go to a member vote.

The mutual is under growing pressure to give members a say in the takeover, which would make it Britain’s seventh largest lender with £89 billion of assets.

Coventry’s larger rival Nationwide Building Society is also holding out against calls to allow its 16 million members a role in deciding if it should buy Virgin Money in a deal that would create the biggest savings and loans group after Lloyds Bank.

Both mutuals have cited the Building Societies Act for not giving members a vote.

The Act says a member poll is required if the deal price is more than 15 per cent of a society’s funds – a measure of financial strength – and if interest and fees from home loans are less than half the income of the bank being bought.

Black hole: The Co-op Bank has returned to profit after a near-death experience nearly 11 years ago

Coventry, which is more than twice the size of its target in terms of assets, declined to say if both measures were met. Co-op Bank said it did not provide an income breakdown.

At its annual meeting last week Coventry members questioned why Co-op Bank’s American hedge fund owners, who rescued the lender from collapse in 2013, were selling now.

In response to a question as to whether Coventry was diving into shark-infested waters, deputy chair Jo Kenrick referred to the bank’s owners as ‘sharks’ and Coventry as ‘nice folk getting in with them’.

But she insisted the society had done its due diligence and the bank was no longer ‘as broken as it was’.

The Co-op Bank has returned to profit after a near-death experience nearly 11 years ago when a £1.5 billion black hole opened up in its accounts and its chairman was filmed buying Class A drugs.

Coventry members pushed back at the board’s suggestion that the Co-op deal was too complicated for some of them to understand.

‘People are not fools,’ said one, adding that they have ‘enough intelligence’ to vote on the matter.