Shawbrook Bank reportedly eyeing Co-operative Bank merger

One of the UK’s largest SME lenders, Shawbrook Bank, is reportedly looking to complete a merger with the Co-operative Bank.

Shawbrook Group has reached out to the Co-op Bank owners with a stock-based merger proposal, as first reported by Sky News.

The specialist savings and lending bank has reportedly hired Barclays to advise on the bid, which would value the Co-op Bank at around £800m and result in a £3.5bn merger.

Back in April, the Co-op Bank was in the early stages of looking at its strategic options, as reported by Reuters, working with advisers at PJT Partners and Fenchurch Advisory.

It was exploring options including selling the bank or an initial public offering, and was reported to be thinking of selling as early as this year, though no decisions had been made.

At the time, Shawbrook Bank was among those listed as potential buyers, alongside OneSavings Bank, FirstRand, Aldermore and Paragon.

The bank was previously in discussions with TSB Group for a merger back in 2021, but the offer was rejected by Spanish parent company Banco Sabadell.

Shawbrook Bank did not respond to AltFi’s request for comment at the time of publication.