The Co-operative Bank says its £780m takeover talks with Coventry Building Society are at a “well advanced” stage.  

“Discussions regarding the potential acquisition of the bank are well advanced following completion of substantive due diligence,” says the Co-op Bank in a short first-quarter trading statement.  

Coventry Building Society’s proposed takeover of the Co-op Bank, announced last month, would create a merged group with £89bn in assets.  

The move follows Nationwide’s March statement that it plans to buy Virgin Money for £2.9bn.  

Co-op Bank chief executive Nick Slape adds that after signing non-binding heads of terms in April the firms “are now working together on the next stages”.  

Coventry Building Society is the UK’s third-largest mutual lender with around 2 million members and assets of £62.5bn. Co-op Bank, which has 2.5 million customers and serves more than 90,000 businesses, is backed by US-based investors including Bain Capital Credit and JC Flowers.  

Co-op Bank says its financial performance in the first quarter is “in line with expectations” and makes no change to its full-year guidance in its update.  

The lender adds that its IT simplification programme “is now nearing completion, with only 6% of savings customers and 14% of mortgage customers left to migrate”.