Coventry Building Society outperforms the market to remain one of the UK’s largest lenders

Coventry Building Society Steve Hughes

Coventry Building Society has seen its growth increase significantly above the level of the market in 2021 due to its ability to adapt to rising demand for mortgages and savings accounts across the country.

Its 2021 Annual Results show the UK’s eighth-largest lender and second-largest building society achieved record mortgage volumes last year and doubled the number of First Time Buyer members as house sales boomed.

The society’s strong financial performance, in which profits bounced back following the Covid-disrupted 2020, also saw savings balances grow as it maintained its record of paying higher than average savings rates.

Coventry Building Society is one of the region’s largest employers and in 2021 was certified as a Great Place To Work, and was recently named one of the UK’s Best Workplaces for Wellbeing.

Results highlights include:

Strong growth in savings and mortgages

Mortgage balances grew by £3.1bn (7.2 per cent) to £46.6bn, significantly above the level of market growth and doubling the number of first-time buyers to 7,100.
Savings balances grew by £1.7bn (4.6 per cent) to £39.9bn with the average savings rate of 0.83 per cent, 0.56 per cent higher than the market average, and the equivalent of an additional £201m interest for savers.

Sustainable profitability and resilient capital and liquidity position

Profit before tax of £233m (2020: £124m). Profitability recovered from 2020 levels driven by balance sheet growth, improved margin and supported by the release of £29m of pandemic related provisions held to cover potential future credit losses.
Net Interest Margin of 0.90 per cent (2020: 0.81 per cent). 1.03 per cent excluding an adjustment of £69m relating to updated assumptions for future SVR income.
Common Equity Tier 1 (CET 1) ratio remains well above statutory requirements at 36.2 per cent whilst the Society’s Leverage Ratio on a UK modified basis increased to 4.8 per cent. The Liquidity Coverage Ratio of 187% is also considerably above the regulatory minimum requirement.

Excellent service while investing to meet the changing needs of members and stakeholders

Excellent customer service with Experience Net Promoter Score of +76 and average call waiting times of 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 per cent.
Leading cost efficiency with a cost to mean asset ratio of 0.50 per cent amongst the lowest of any UK building society and a cost to income ratio of 56 per cent, whilst investing £96 million in 2021 in technology infrastructure, digital services and transforming our branch network.
Strong community investment of £1.6m tackling three priority issues around homelessness, helping young people acquire the financial skills and knowledge on which to base good careers, and social isolation.
Responding to climate change The Society signed up to the UN Global Compact, transitioned to 100 per cent renewable sources of energy, and achieved net zero for its Scope 2 emissions and carbon neutrality for Scope 1.

Commenting on the results, Chief Executiv Steve Hughes (pictured) 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.

“We are proudly a Coventry business and have been a long-standing supporter of the city’s year as UK City of Culture. We’ve centred much of our community activity on our home city and the surrounding area too, and we have invested in long-term partnerships with local charities that share our goals, concentrating our resources on issues and in places where it can make most difference.

“We have shown, despite the challenges of the pandemic, that we can meet the needs of today’s members whilst laying the foundations for the future and, as we move on from the challenges of the pandemic, I am very confident about the year ahead.”