CFS ahead of plan with integration of Britannia
THE Co-operative Group’s Financial Services arm said that it was making substantial headway integrating the Britannia Building Society business into its estate after declaring a 21% rise in income to £673.5m in the first half of 2010.
Profit before tax, distributions and amortisation increased by 50% to £75.9m.
The organisation said that at the time of the merger, it expected to achieve “synergy benefits” of £60m by 2012 and that £30m of this would be achieved by the end of 2010.
“Progress is such that CFS expects to beat this year’s target by approximately £8m,” the group said in a statement to the stock exchange this morning.
The group of businesses which includes the Co-operative bank, Britannia, and its insurance and asset management arms, said that the number of customer deposits it received increased by 4.2% to £1.4bn.
It said that it had continued to attract new corporate and retail customers “who want to be part of a financially strong business untainted by the credit crisis” due to its member-owned, ethically-guided structure. This helped to improve its liquidity (its customer funding ratio increased to 110%) and its ability to increase lending into both the corporate and retail markets.
Deposits received from its corporate customers grew by what it described as “an unprecedented” amount – up 24% to £800m.
Co-operative Financial Services also said that it had benefited from a drop in impairments suffered from bad loans, which fell by 41% to £43m. It put this down to “improvements in arrears collection and credit risk profiling” as well as the quality of its assets. It said that its residential loan book is “predominantly prime”, geographically well-spread and had typically low loan-to-value ratios.
CFS said that it had now rolled out its Co-operative current accounts to all Britannia members. The rest of its product portfolio was now being aligned, and a new online banking system is being rolled out to customers of both businesses.
