Coventry Building Society enjoys record year
COVENTRY Building Society has announced record growth for 2011 but has warned the difficult economic conditions leave no room for complacency.
The society, which accounts for more than 18% of net mortgage lending in the UK and is the country’s third largest building society, announced a record operating profit before impairments and exceptional items of £94.5m (2010: £85m).
Underlying pre-tax profit increased by 12% to £84.6m (2010: £75.3m).
The society’s share of both mortgage and retail savings stock increased further, each to record levels, while retail savings balances grew by £1.4bn to £19bn (2010: £17.6bn).
David Stewart, chief executive, said: “I am pleased to report that the society has maintained its track record of consistent and strong performance. I believe that Coventry’s success in serving the interests of its members throughout the financial crisis whilst remaining financially strong, secure and growing, stands comparison with that of any large bank or building society.
“In 2011 the society once again reported strong profitability, with underlying profit increasing by over 12%. This rise in sustainable profits was achieved through continued growth in responsible mortgage lending funded by another exceptional performance in attracting and retaining retail balances. Importantly, it was achieved whilst continuing to offer value to savings and borrowing customers, as evidenced by the low net interest margin which has remained stable and under control throughout the financial crisis.
“In 2011, as in the two previous years, the society was also able to source competitive funds from the wholesale markets and executed two notable debut transactions by launching both sterling and euro covered bonds. The success of these issuances is testament to the financial strength of the Society and the confidence that institutional investors have in the capability of Coventry Building Society to prosper in what are undeniably challenging conditions.”
Gross mortgage advances reached £4bn, representing around 17% of all mortgage advances by building societies and mutual lenders. Net mortgage lending of £1.7bn, equivalent to 18.3% of all net mortgage lending in the UK.
It said it had an exceptionally strong funding position, evidenced by its inaugural sterling covered bond issuance of £750m and its first euro covered bond of €650m.
Since December 31, 2006, the society has achieved the highest organic growth in mortgage and savings market share of any top ten building society and reported strong profits together with organic mortgage and savings growth in each and every year.
Total assets have grown by £12.2bn (99%); mortgage balances have increased by £9.2bn (93%) and savings balances have risen £10.8bn (130%).
Mr Stewart added: “The recognition that economic conditions may worsen significantly in 2012 shows there is no room for complacency, but I remain confident that Coventry remains well placed to continue to protect members’ interests and report further progress in the years ahead.”
