Acquisition also drives increase in mortgage market share
Coventry Building Society Group has reported a substantial increase in statutory profit before tax for the first half of the year, reaching £722 million, compared to £159 million in the same period last year.
The results include a £584 million gain related to the acquisition of The Co-operative Bank, attributed to the purchase price being more than 40% below the fair value of the net assets acquired.
Underlying profit before tax rose to £200 million, up from £159 million a year earlier. The group’s total underlying income increased to £554 million, while the net interest margin improved to 1.24%. Underlying costs for the group stood at £345 million, which includes £186 million in costs from the newly acquired bank. Costs for the society sub group remained steady at £158 million, excluding deal-related expenses from the previous year.
The group’s leverage ratio declined to 4.5% from 5.7% at the end of last year, and its CET 1 ratio decreased to 19.1% from 28.0%, both remaining above regulatory requirements. The Co-operative Bank acquisition has increased Coventry’s share of the UK mortgage market to 4.3%, up from 3.1% at the end of last year, and its savings market share to 3.3%. The group also gained a 1.7% share in the personal current accounts segment.
In April, Coventry Building Society Group launched a limited company buy-to-let proposition, expanding its presence in the residential rental market. The group reported a strong pipeline of applications in the first three months following the launch.
“This is a transformational year with the addition of The Co-operative Bank into the Coventry Building Society Group, and it is pleasing to see such a robust performance in the first six months,” said Steve Hughes, chief executive at Coventry Building Society.
“We remain focused on delivering the right outcomes for our members and customers as we continue our journey of building a purpose-led organisation that will stand out in UK financial services.”
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