Strong savings and mortgages performance by Coventry Building Society

In its final results, Coventry Building Society reported its profit before tax was significantly higher at £233m than in 2020 (£124m).

The Society says this is down to the demand for mortgages, improved margins and lower credit losses throughout the year.

Mortgage balances grew by £3.1bn to £46.6bn as it doubled the number of first-time buyers to 7,100.

The end of the temporary reduction in stamp duty led to record purchases and redemptions which was followed by an increase in remortgage and product transfers as interest rate expectations increased.

In addition, Coventry Building Society says this was aided by the strong position of the labour market as the furlough scheme ended, this kept the demand for new mortgages and also repayments continued for existing loans.

Existing and new borrowers were also given an incentive to increase the energy efficiency of their property through the ‘Green Together Reward’.

The building society’s savings balances grew by 4.6% to £39.9bn during a year it says where it had to ‘balance the returns we offer savings members with our long-term sustainability.

With an average savings rate of 0.83%, which is 0.56% higher than the market average, the Society says it paid the equivalent of an additional £201m interest for savers in 2021 when compared with the markets average.

Steve Hughes, Chief Executive, Coventry Building Society, said: “A surge in demand for homes combined with the Stamp Duty holiday created a buoyant and extremely busy mortgage market in 2021. I am very proud of the way my colleagues, the majority working remotely, stepped up and delivered fantastic, confidence-inspiring service to our more than two million members during these months.

“The face-to-face service in our branch network has been a lifeline to many of our members throughout the pandemic and we have continued to invest heavily in our branches in Coventry and across the country. This investment will be completed in 2022 and we will soon have a fully upgraded network of modern branches from Sheffield to Somerset, including ten in Coventry itself.

“Our pride in our home city is matched by our ambition to grow across the UK. And our 10-year naming rights deal for Coventry Building Society Arena, that began in July, not only shows our commitment to the city but also gives us a fantastic opportunity to raise our profile with new audiences from across the country.”

Success was felt by the Society following its customer service score as the average call waiting time was 49 seconds during a period of exceptional demand.

The Society continues to report one of the lowest complaint overturn rates by the Financial Ombudsman Service at below 5%.

Strong investment was felt in the community with £1.6m helping to tackle homelessness, young people gaining financial skills and social isolation.

The Society has also signed up to the UN Global Company where it has transitioned to 100% renewable energy achieved net-zero for its Scope 2 emissions and carbon neutrality for Scope 1.