Commenting on these results, Steve Hughes, Chief Executive Coventry Building Society, said:
“Changes to the interest rate environment have created volatility in markets and a fast-moving situation for savers and borrowers alike. In this context we have delivered a strong but importantly a balanced performance by concentrating on great value products and outstanding service, and ensuring we have the right foundations in place to support our future success. We have proactively supported borrowers, delivered greater benefit to savers and enhanced our financial resilience. Our growth has been ahead of the market, creating jobs and delivering on our sustainability goals. These are important proof points of the mutual model.”
Growing mortgages and savings
- Mortgage balances grew by £0.8bn (1.7%) to £48.8bn. We have grown mortgage balances in a broadly flat market by taking a responsible approach to lending that reflects current market conditions and the needs of our members. Gross advances of £4.0bn increased by 5.2% on H1 2022.
- Savings balances grew by £3.2bn (7.5%) to £45.5bn. We have grown savings by offering exceptional and competitive products, with a focus of rewarding loyalty. We have paid higher savings rates than the market average, increasing the premium we pay members by more than 60% from £99m to £163m.
Strong financial performance
- Profit before tax of £269m (H1 2022: £158m). The rising interest rate environment supported an improved income performance with a net interest margin of 1.34% (H1 2022: 1.11%) even after offering better rates to savers and protecting variable rate mortgage customers from the full rises in interest rates.
- The Society’s leverage ratio increased to 5.5% (FY 2022: 5.2%). Strong profitability has strengthened our capital position and resilience facing into a weaker economic outlook. The Common Equity Tier 1 (CET 1) ratio has also strengthened and remains well above statutory requirements at 30.4% (FY 2022: 27.4%).
- Continued low arrears balances of 0.22% of mortgages more than three months in arrears (FY 2022: 0.17%). The credit quality of our mortgage book remains resilient and less than a third of industry average1.
Delivering on our service promise whilst continuing to invest for the future
- Excellent customer service with Experience Net Promoter Score of +74 (FY 2022: +75) and investment in operational capacity during a period of exceptional demand from members, customers and brokers.
- Invested £44m in H1 2023 in technology infrastructure, digital transformation, operational and financial resilience with further key milestones due in H2.
Supporting colleagues and the communities we serve
- We launched our new corporate partnership with Centrepoint to support its national and local programmes to end youth homelessness. First building society to achieve B Corp status. We’re the first UK building society to be awarded B Corp accreditation, global gold standard for sustainability.
- Improved our ranking in the Great Place to Work table of super large organisations from 17 to 13, as well as being recognised as one of the best places to work for women in super large UK companies.