Not content with buying supermarket chain Somerfield from relieved private equity backers for £1.6bn, the Co-operative movement has decided to take a punt on the mortgage sector by merging with Britannia Building Society, the second largest in Britain.

The Co-op Financial Services' deal will increase its exposure to mortgages almost fourfold. It currently only has £5.6bn exposure to mortgages and unsecured lending as opposed to Britannia's £21.4bn, out of roughly equal assets.