The Chairman of the West Bromwich Building Society today hit out at reports that a rival society was lining up a takeover bid.

The Coventry Building Society is said to have appointed investment bankers Gleacher Shacklock to advise it on a possible bid. But bosses at West Bromwich said they had not received any approach and were in no need of a rescue.

Coventry is one of the societies being lined up by the Financial Services Authority (FSA) to take over small mutuals due to concerns that they face heavy losses on commercial property. The news comes days after a second credit agency downgraded the West Brom’s rating.

Brian Woods-Scawen, chairman of the 160-year-old West Bromwich Building Society, said today: “I cannot comment on what the Coventry is or is not doing but our advisers have had no involvement or discussions with their advisers.

“Our position is unchanged on last week. We believe we have a strong and sustainable future as an independent building society.”

Last weekend reports emerged claiming the FSA was looking for a “white knight” to rescue the West Bromwich.

But West Bromwich chief executive Robert Sharpe was quick to dispel the rumours, saying he had “no knowledge of the FSA holding merger discussions relating to the society”.

The West Brom has 530,000 members and employs 850 staff.

The FSA was said to be concerned over significant losses made by the building society on commercial property loans after studying a draft of its results for the year to March 31.

The mutual had savings balances of £5.5 billion as of March 31, 2008, but also has a large exposure to buy-to-let mortgages as well as commercial loans.

At the weekend rating agency Fitch Ratings said it had downgraded the West Bromwich, Chelsea, Newcastle, Principality, and Yorkshire building societies.

The West Brom said the ratings would not affect members’ savings and were mainly used as a guide for city institutions rather than the individuals who provide the bulk of its business.

It came a month after another agency, Moody’s, also downgraded the West Brom rating.