Shawbrook exploring £5bn merger with Starling Bank

The specialist bank reached out to Starling in the last two months to gauge its interest in a deal, although city sources told Sky News that an approach was at a "highly preliminary" stage and did not involve any detail about the proposed terms of the transaction.

Additionally, there are not understood to be any live discussions between the two sides – but the "door has been left ajar" for Shawbrook to return with a formal offer.

Controlled by private equity firms BC Partners and Pollen Street Capital, Shawbrook has explored potential mergers in the past – including with Metro Bank and the Co-operative Bank, the latter of which completed a sale to Coventry Building Society at the start of this year.