In its first annual results since its acquisition of the Co-op Bank, Coventry Building Society has reported a fall in pre-tax profit to £323m for 2024 – down from £474m in 2023.
The fall in profit, in line with expectations, was driven by falling mortgage costs as UK interest rates eased, reducing the society’s net interest margin, and savers switching to higher-interest accounts.
CEO Steve Hughes welcomed “another balanced and disciplined set of results, growing mortgages and savings ahead of the market, delivering the outstanding service and value our members expect, and continuing the strong financial performance that has underpinned the transformational acquisition of the Co-operative Bank”.
He added: “We remain absolutely focused on delivering the right outcomes for our members and customers as we continue our journey of building a brilliant, purpose-led organisation that will stand out in UK financial services.”
But the society saw mortgage balances grow by £1.5bn (3.0%) to £51.8bn.
“We grew balances in a low growth market by taking a focused and responsible approach to lending that reflects current market conditions and the needs of our members,” said the report. “Our residential balances increased by 4.8% outperforming the market with our buy to let book remaining stable despite a small contraction in the market. Gross advances of £6.7bn were slightly lower than prior year supported by higher retention levels.”
And savings balances grew by £1.8bn (3.7%) to £49.3bn.
Related: A good news story for UK mutuality
“We have grown savings by offering competitive rates to members and incentivising savings for key groups including those saving for a first home,” added the report. “We continued to pay higher rates than the market average, with the premium we pay members increasing from £342m to a record £401m.”
The Coventry’s leverage ratio increased to 5.7% (2023: 5.4%).
“Strong profitability further enhanced our capital position and resilience ahead of the Co-operative Bank acquisition which completed on 1 January,” it said, adding that the the Common Equity Tier 1 (CET 1) ratio at 28.0% (2023: 29.1%) remains well above statutory requirements.
The society added that it had delivered “exceptional customer service with Net Promoter Score improving further to +79 (2023: +76) and continued investment helping to reduce call answering time from 105 to 58 seconds”.
Over the year it invested £91m in technology infrastructure and digital capability with the launch of a new app, development of its mortgage origination platform and improvement in operational and financial resilience.
The society said it had improved its Great Place to Work survey ‘Trust Index score’ from 81% to 83%, “putting us amongst the best workplaces in the ‘super large company’ category as well as being recognised as one of the Fortune 100 Best Companies to work for in Europe”.
Community support saw £4.5m of investment in 2024 (2023: £3.1m), “helping local partners and building on our relationship with Centrepoint with an additional £1m donation in 2024 to support youth independent living in Manchester“.
