Britannia, the UK’s second-largest building society, is in early stage discussions with the financial services arm of the Co-operative Group about combining the two businesses, in a move that could further reshape the landscape of the UK lending industry.

Both Britannia and Co-operative Financial Services confirmed on Sunday that they were in “exploratory talks” over a wide range of options on how the two companies could work together, including a possible merger that would create a “super mutual” with £70bn of assets and 6m members.