The deal will create a lender with nearly five million customers and an £89 billion balance sheet, returning the bank to its mutual roots.

Coventry will retain the Co-operative Bank name during an integration period expected to last several years, but has not ruled out dropping the brand long-term. This move would distance the group from past scandals, including a £1.5bn accounting error in 2013 that led to its separation from the Co-operative Group.

The Co-operative Bank’s right to use the Co-op name, granted despite majority ownership by hedge funds, could be withdrawn at any time by regulators, The Guardian reports.

Coventry, the UK’s second-largest building society, aims to increase its mortgage market share and gain a foothold in current account and business banking through this deal. The Co-operative Bank, with 2.5 million retail and 94,000 small business customers, will become a Coventry subsidiary.

The deal, expected to complete in early 2025, follows a trend of consolidation in the banking sector, including Nationwide’s takeover of Virgin Money.