Britain's Co-Operative Bank in exclusive talks with Coventry Building Society

LONDON (Reuters) -Britain's Co-Operative Bank said on Thursday it had entered a period of exclusive discussions with Coventry Building Society with a view to a possible merger, after kickstarting a strategic review on November 8.

Following an undisclosed number of non-binding proposals from potential bidders, the lender said its formal discussions with Coventry would enable both parties to "better evaluate the merits of a combination".

There is no certainty that the talks will result in a transaction, Co-op Bank said, adding that a further update will be provided in due course.

Co-op Bank had been working to turn around its finances and has bounced back into profit in recent years after its near-collapse and rescue by a group of U.S. hedge funds in 2017.

The lender has long been seen as a potential takeover target, as mid-sized lenders generally have struggled to gain scale to break the dominance of Britain's 'Big Four' banks - Lloyds, Barclays, NatWest and HSBC.

Reuters reported in April that Co-op Bank was exploring its strategic options.

In October, Reuters reported that private equity backed Shawbrook had tabled an indicative bid for Co-op bank.

Rival mid-sized lender Metro Bank secured a 925 million pound ($1.17 billion) refinancing package earlier this year to shore up its finances after urgent weekend talks, in a sign of the wider strains facing Britain's so-called 'challenger banks'.

($1 = 0.7926 pounds)

(Reporting by Sinead Cruise and Iain Withers, editing by Lawrence White)