The financial sector has been told to brace itself for more consolidation in 2024 on the back of news regarding the Coventry Building Society and Co-operative Bank merger.
Late last week The Coventry agreed on a takeover of the Co-operative Bank in a deal worth around £780m.
The takeover is the latest in a string of banking mergers after Nationwide agreed to buy Virgin Money and Barclays bought Tesco Bank’s retail banking operations in February.
And Paul Hunt, CEO at Phoebus Software, the mortgage and savings servicing provider for financial institutions, says there’s more to come.
Hunts said: “Coventry Building Society’s proposed acquisition of the Co-operative Bank is a sign of what we can expect more of as 2024 progresses: market consolidation in the UK financial sector.
“After a very chilly 2023, when investors held onto their cash, 2024 is warm and getting warmer for market consolidation.
“The mood was set in March with Nationwide’s acquisition of Virgin Money for a not immodest £2.9bn. I think we will see more businesses making bold moves and joining forces as the year progresses.
“With strengthening market sentiment, now is the time investors have been waiting for.
“In January there was a record £2.4trn in global cash reserves – most of which is probably still sitting there, waiting for the right buyout or other investment such as in the securitisation of lenders’ back books ahead of the July 2024 Consumer Duty deadline.
“Watch this space. Market consolidation is set to springboard.”
