Coventry reports pre-tax profit of £56.2m
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Coventry Building Society has reported a pre-tax profit of £56.2m for 2009, compared to a £26.4m profit in 2008.
It saw a record operating profit before impairments and exceptional items of £75.0m, compared to £71.7m in 2008.
It also had gross mortgage lending of over £2.7bn, representing 15% of all new lending by building societies.
Net mortgage lending totalled £919m, equivalent to 8% of all net lending undertaken across the market as a whole.
It says continued lending was made possible by a strong funding position, its retail savings balances grew by £833m in 2009 and have increased by £5bn - 61% in the last three years.
Mortgage balances 2.5% or more in arrears are around one third of the industry average, with loan loss provisions amongst the lowest of any large UK lender.
It says all growth is organic and lending is concentrated in low risk, residential sectors. The society has never purchased a mortgage book or undertaken second charge or commercial lending, with100% of mortgages funded by retail savings, capital and reserve.
David Stewart, chief executive of Coventry, says: “These results confirm Coventry Building Society to be one of the most resilient mortgage lenders in the UK and show that building societies are alive and well in 2010.
“The society’s strength is its ability to execute this simple business model without recourse to new or increased levels of risk. This has meant that we have avoided the pitfalls that have limited lending at some of our competitors.”
Readers' comments (9)
Ronnie Forrest | 2 Mar 2010 10:36 am
I voted no for The Leeds Permanent to merge with Halifax!
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Anonymous | 2 Mar 2010 11:05 am
I am not surprised that they have made so much profit, i took a buy to let tracker mortgage out with them 3 years ago, i don't know what it tracks, but it's not the Bank of England Base Rate. The interest charged by the Coventry is 4 times greater than other buy to let trackers i have.
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Stewart Humphries | 2 Mar 2010 11:24 am
To Anonymous at 11:05am - so you don't actually know what your mortgage product is. And this is the Coventry's fault how exactly? I hope to goodness you're not a mortgage broker.
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Jeremy | 2 Mar 2010 11:43 am
Anonymous ; your other buy to let lenders went bust didnt they ??
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Carwyn Evans | 2 Mar 2010 12:07 pm
I actually think they are a really good lender. The products are usually competative and service is good compared to most lenders at the moment.By not buying another company's book and running the society on low risk lending it was able to lend last year where a lot of lenders were struggling. I placed a lot of business with them last year as they had some of the best product available, helping us as brokers when times were hard.
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Anonymous | 2 Mar 2010 1:05 pm
Maximum respect to the Coventry Building Society who have Never dual priced and always support brokers.
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B.L.B. Financial Services | 2 Mar 2010 1:16 pm
Have to agree with Carwyn Evans, the Coventry are one of the better lenders to deal with, they are quick to process cased and unlike most other lenders, they do not differentiate between brokers and direct channels.
One of the best lenders around IMHO.
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Michael White CEO Emailmortgages | 2 Mar 2010 4:01 pm
A worrying new business period but nonetheless a time of low average LTVs and wide margins that should enable a professional lender to benefit in full from well planned and proven lending risk management policies.
The Coventry have very much taken full advantage and clearly adapted very successfully.
A quite proficient approach is further evidenced with mortgage arrears performance at just one third of the industry average, and with loan loss provisions amongst the lowest of any large UK lender. An overall exceptional accomplishment.
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salil chaudhari | 4 Mar 2010 8:31 pm
It begs the question why don't the other lenders follow the coventry's simple but successful business model? Copy it and be successful. Well done to Coventry's staff and management.
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