However CFS say the setting up of a â€˜super mutualâ€™ with over six million customers and Â£70 billion worth of assets is just one of the options being considered.
A spokesman told the News that CFS is in a strong financial position, but would like to significantly increase its market share in core markets over the next few years.
â€œWe are speaking with Britannia and indeed other parties on a range of possibilities which could include our products being sold for example in their branch networks,â€ said the spokesman.
â€œComing together under a merger is one possibility, but at present legislation is not in place to enable this to happen between a building society and a co-operative and the market environment presently is also too volatile, even though we are coming at this from a clear position of strength. Â
â€œWe have ambitious growth plans and have had discussions with a number of parties, including Britannia, about how we can work more closely together for mutual benefit.â€
CFS Chief Executive David Anderson commented: `The Britannia Building Society is a strong and trusted member â€” owned business which shares with CFS a common set of ethical values and principles.
`Both businesses are entering into these discussions from a position of strength and clearly there are a number of potential options to explore. We will only take action, however, which benefits further the clear momentum occurring now within the co-operative and mutual sector.â€
Britanniaâ€™s Chief Executive Neville Richardson said: `As two like-minded, forward-thinking and financially strong mutuals, weâ€™re talking with CFS about how we can work together to create an exciting proposition for our members.
`Both businesses have been pursuing successful strategies and donâ€™t need to merge, but we recognise we could be even more successful by coming together and creating the UK’s most trusted financial services business.â€
The Britannia is based in Leek, Staffs; has 2.6 million members and operates a network of 245 branches.