Building society upbeat despite profits falling by one-third

Pre-tax profits fell by one-third at Coventry Building Society in a “challenging environment” of price competition and economic uncertainty.

However the Society enjoyed success in attracting and retaining borrowers and savers, which it said “demonstrates the strength” of its model.

It believes its mortgage balances have grown by more than two and a half times the rate of the market in the last year, while its savings growth was three times the average.

“This performance was achieved in what continues to be a challenging environment,” said Mark Parsons, Coventry Building Society’s chief executive.

“While demand for cash savings has strengthened, economic and political uncertainty is affecting the UK’s overall growth rate with reduced activity in the housing market, lower overall house price inflation and even some areas of house price decline. This, and the depth of competition in both mortgages and savings, has resulted in strong price competition.”

Coventry Building Society’s first half figures for 2019 show its gross mortgage lending was down 11%, to £4.1bn, and net lending was 13% lower at £1.3bn.

The building society said it had performed strongly against its strategic goals in the first half of 2019, continuing its track record of savings and mortgage growth while taking forward its strategic investment programmes for the benefit of existing and future members.

It plans to invest in developing its service capability and resilience, which includes its branch redesign programme and updating its data centres.