Profits up 8% at Coventry

The Coventry Building Society has announced an eight per cent increase in profits during the first half of 2008.

During the first six months of 2008 the company made a profit of £35.5 million, up from £32.9 million in 2007.

Retail savings balances at the society also increased by £905 million (nine per cent) during the first six months of the year, and are up by £2,743 million (32 per cent) in the twelve months since June 30th 2007.

"I am pleased with our performance in the first half of 2008. We have increased our market share and, as a result, I can report strong growth in savings and mortgages," said Coventry chief executive, David Stewart.

"There's no doubt that this is a tough climate for mortgage lenders.

"However, our ability to attract and retain retail savings and our consistent focus over many years on low risk lending means we have been able to meet the challenges that we have faced. These results testify that Coventry Building Society is in good shape."

Mortgages and other loans at the UK's fourth largest lender grew by £862 million (seven per cent) in the half year and by £1,930 million (18 per cent) since June 30th2007.

Coventry also confirmed total assets reached £16.3 billion, an increase of nine per cent over December 31st 2007.

Furthermore, despite a fall in the wider market – with the Council of Mortgage Lenders (CML) reporting a 27 per cent fall in lending year-on-year - Coventry secured a one per cent increase in mortgage lending over the period.

Gross mortgage advances now total £1.9 billion.

Credit quality also remains high, according to the results, with only 0.18 per cent of accounts greater than six months in arrears, one third of the CML average.

With no exposure to the American subprime assets, nor collateralised debt obligations (CDO) or structured investment vehicle (SIV) investments, Coventry has largely been immune from the financial strife sweeping the markets.

All growth within the organisation is organic and concentrated in low risk, residential sectors.

The society has never purchased a mortgage book.