Record year for Coventry Building Society
Coventry Building Society has posted recorded profits for 2011 as it accounted for more than 18 per cent of net mortgage lending in the UK.
Operating profit before impairments and exceptional items in the year to 31 December 2011 was £94.5m, up from £85m in 2010. Underlying profit before tax at the lender increased by 12 per cent to £84.6m.
Gross mortgage advances totalled £4bn, which represented 2.8 per cent of all mortgage advances in the UK and about 17 per cent of all lending by building societies and mutual lenders, the business told the Stock Exchange.
Coventry's share of new mortgage lending has more than trebled since 2006. Net lending in 2011 totalled £1.7bn, equivalent to 18.3 per cent of all net mortgage lending undertaken in the UK.
Chief executive David Stewart said: "The rise in sustainable profits was achieved through continued growth in responsible mortgage lending funded by another exceptional performance in attracting and retaining retail balances.
"Importantly, it was achieved while continuing to offer value to savings and borrowing customers, as evidenced by the low net interest margin which has remained stable and under control throughout the financial crisis.
"In 2011, as in the two previous years, the society was also able to source competitive funds from the wholesale markets and executed two notable debut transactions by launching both sterling and euro covered bonds."
Its strong funding position is evidenced by its inaugural sterling covered bond issuance of £750m in April and first euro covered bond of €650m in October 2011, the company added.
Retail savings balances grew by £1.4bn in the period to £19bn, with more than 400,000 customers opening accounts with the society in 2011.
Operating profit after impairments and exceptional items, including £10.7m of integration and merger costs and losses on loans and advances to customers of £9.9m, was £60.5m, compared with £58.5m in 2010.
Pre-tax profit was down from £100.6m to £59.5m as the society received a £43.8m gain on business combination in 2010, which boosted its before tax profit.