Commenting on these results, Steve Hughes, Chief Executive of Coventry Building Society, said:
We delivered a strong financial performance and made good progress against our strategic goals. This performance reflects an exceptional commitment to members and customers by my colleagues across the Society and I am so proud of what they have delivered. We continue to focus on running the Society in the long-term interest of our members and ensuring that we are set up for long-term success.
Strong growth in savings and mortgages
- Mortgage balances grew by £3.1bn (7.2%) to £46.6bn, significantly above the level of market growth¹ and doubling the number of first time buyers to 7,100.
- Savings balances grew by £1.7bn (4.6%) to £39.9bn with the average savings rate of 0.83%, 0.56% higher than the market average², 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% (2020: 0.81%). 1.03% 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% whilst the Society’s Leverage Ratio on a UK modified basis increased to 4.8%. 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 Score³ 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%.
- Leading cost efficiency with a cost to mean asset ratio of 0.50%⁴ amongst the lowest of any UK building society and a cost to income ratio of 56%⁵, whilst investing £96 million in 2021 in technology infrastructure, digital services and transforming our branch network.
- Strong community investment of £1.6m⁶ 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% renewable sources of energy, and achieved net zero for its Scope 2 emissions and carbon neutrality for Scope 1.
1. Source: Bank of England.
2. Based on the Society’s average month end savings rate compared to the CACI market average rate for savings accounts, excluding current accounts and offset savings, for the first 11 months of the year. This measure and comparative have been updated in the year to use CACI source data for the market rate; previous source Bank of England.
3. Net Promoter Score (NPS) is a measure of customer advocacy that ranges between -100 and +100 which represents how likely a customer is to recommend our products and services.
4. Administrative expenses, depreciation and amortisation/Average total assets.
5. Administrative expenses, depreciation and amortisation/Total income.
6. Total community investment made by the Society including donations from the Society and fundraising activities.
You can find out more information about these results by downloading our 2021 Year End Financial Results - news release (PDF 1MB).