New mortgage lending growth boosts Coventry BS’s profits

Coventry Building Society has reported a 49 per cent rise in pre-tax profits for the year ending 31 December 2012 and that it has taken its highest ever share of the UK mortgage market.

Coventry 480

The mutual’s pre-tax profits rose from £59.5m in 2011 to £88.5m by the end of last year and new mortgage lending increased 29 per cent to reach £5.1bn. Coventry’s market share is now four times greater than at the outset of the financial crisis in 2007 and represents 3.6 per cent of new UK mortgages.

Mortgage assets increased by 15 per cent over the same period of time, from £19.2bn to £22bn.

Chief executive David Stewart says: “We continued to grow our mortgage assets whilst retaining the quality of lending that protects individual members and the society alike. We helped homeowners and, most importantly, we have done the right thing for our savers.

“We have reported the highest average rate to savers of all large building societies since 2007 and whilst we do not yet have comparative figures for 2012, our average savings rate rose during the year to 2.83 per cent. We increased the average rates we paid on Isas and, from 6 April, will take what we believe to be a unique step of raising easy access variable Isa rates further to 2.50 per cent AER. Every one of our quarter of a million Isa customers will be paid at least this best buy rate.

“Whilst no guarantee can be made of long- term rates, as a mutual organisation owned by its savers and borrowers, we believe this is the right thing to do and we are pleased to be able to take a lead in supporting savers in this difficult environment.”

In June 2012, Coventry completed the purchase of a £0.5bn loan book comprising UK buy-to-let mortgages originated by Bank of Ireland’s UK businesses. The book currently has an average indexed loan to value ratio of 54 per cent.