The £70 billion mega-merger between Britannia Building Society and Co-op Financial Services (CFS) will mean better deals for customers, says the combined entity's CEO Neville Richardson.

Following the overwhelming support from members together with final approval from the UK regulator FSA, the new firm, named Co-operative Financial Services, was legally formed on August 1, 2009.

The new powerhouse will have more than nine million customers, 12,000 staff, 300 branches, and 20 corporate banking centres.

Richardson said the tie-up will mean better deals for customers.

''First to benefit will be 35,000 customers on Britannia's 4.49 per cent standard variable mortgage rate. They will switch to the Co-op's rate of 4.24 per cent, saving borrowers with a typical £100,000 loan around £20 a month,'' Richardson noted.

The merger will create a new organisation that has a robust capital position, excellent liquidity and funding underpinned by strong underlying profits. The business will be strongly capitalised, with a pro forma Tier 1 ratio of 9.2 per cent.