Coventry Bs12e% Regulatory News (CVBP)

22 Feb 2005 07:30

Coventry Building Society 22 February 2005 Coventry Building Society Coventry announces another year of success Coventry Building Society today announces its results for the year ended 31December 2004, which reflect another successful year. Highlights • Gross lending of £2.2 billion • Net lending of £409 million • Net savings' balances increased by £101 million • Growth in total assets of 5.7% to over £9.4 billion • Interest margin narrowed to 0.95% of average assets, giving increasedmember benefits • Administrative expenses ratio reduced to 0.60% of average assets -lowest of any major building society • Profit before tax increased by 7.2% to a record £50.7 million • Just three properties in possession - mortgage arrears significantlybetter than industry average Commenting on the results, Martin Ritchley, Chief Executive said: "Our results for 2004 represent another successful year for Coventry BuildingSociety. In a highly competitive market, we achieved gross mortgage lending ofalmost £2.2 billion, the second best total in our history, as well as netlending of £409 million. Our assets grew by over £500 million to total over £9.4billion. For the ninth successive year, we have improved our cost ratio,maintaining our position as the most cost efficient major building society inthe UK. These results reinforce the Coventry's position as, not only the fifthlargest, but also one of the country's most successful building societies." Reviewing 2004, Martin Ritchley continues: "Our lending has been achieved in a housing market which has lost some of itsmomentum, reflecting the competitiveness of our mortgage products, for which wewere awarded no less than six accolades. "Over the past few years, we have consistently narrowed our interest margin(principally the difference between the interest we earn from borrowers and theinterest we pay to savers) for the benefit of members. Last year was noexception and the Society's net interest margin narrowed in 2004 from 1.03% to0.95% of average assets. "The Coventry's net interest margin is still one of the narrowest in theindustry and the fact that the Society can operate so effectively at this levelunderlines the significant competitive advantage which we derive from ourbuilding society status. Quite simply, we have no dividends to pay to externalshareholders, which means we can offer more competitive rates to borrowers andsavers alike. "Despite the narrower interest margin, we still achieved a record profit of£50.7 million, enabling us to improve our gross capital ratio to 6.12%. Animportant feature of this success was our ability to contain costs, whilstmaking the necessary investment to achieve compliance with mortgage and generalinsurance regulation. Although we achieved asset growth of almost 6%, our costsincreased by only 2% - less than the rate of inflation. This means we have madesavings in real terms, with our administrative expenses to average assets ratioreducing again from 0.63% to 0.60% of average assets - the ninth successive yearof improvement. This maintains our position as the most cost efficient majorbuilding society. We have also maintained the quality of our mortgage book. Ourarrears' performance was already better than the industry average, but in 2004we have improved still further, with just three properties in possession at theyear end. "Savings' balances increased by £101 million, to a record £6,558 million. Sincethe year end, our innovative Family 1st Account, designed to encourage savingsfrom families in receipt of child benefit, has achieved widespread acclaim, aswell as a significant response from both new and existing customers. "As a building society committed to putting members first, our results in 2004reflect yet again that we have a formula to deliver commercial success. Ourresults provide the firm foundation upon which to grow our business for thebenefit of our saving and borrowing members." Notes to Editors • A summary of the results for the year is attached • Martin Ritchley, Chief Executive is available for interview andcomment • Photographs of Martin Ritchley can also be downloaded from the photolibrary on our website • Coventry Building Society is currently the fifth largest buildingsociety in the UK • Awards in 2004 include 'Best Capped Rate Mortgage Provider' fromMoneyfacts, 'Best Online Lender' from Mortgage Magazine, 'Best Online MortgageProvider' from Your Money Direct, 'Best Self Certification Lender' from MortgageAdvisor and Homebuyer Magazine, a 'Four Star Rating for Mortgage Lenders' at theFinancial Adviser Service Awards and Highly Commended Online Mortgage Lenderfrom Your Mortgage. Coventry Building Society Results for the year ended 31st December 2004 Key Results Year Ended 31.12.04 Year £m Ended 31.12.03 £m Pre tax profits 50.7 47.3Provisioning 0.4 5.0Gross lending 2,198 2,464Net lending 409 863Net receipts from shares (1) 101 244Total assets 9,443 8,937 Key Ratios Year Ended 31.12.04 Year % Ended 31.12.03 % Asset growth 5.67 10.90Commercial asset growth 5.56 13.31Gross capital 6.12 5.67Free capital 6.05 5.67Net interest margin (2) 0.95 1.03Management expenses to average assets (2) 0.60 0.63Profit before tax to average assets (2) 0.55 0.56 Income and Expenditure Account Year Ended 31.12.04 Year £m Ended 31.12.03 £m Net interest receivable 87.0 87.6Other income and charges 19.1 18.6Total income 106.1 106.2Management expenses (55.0) (53.9)Provisions (0.4) (5.0)Profit before tax 50.7 47.3Tax (15.7) (14.1)Profit after tax 35.0 33.2 There are no recognised gains and losses other than the profit for the financialperiods Balance Sheet As at 31.12.04 As at 31.12.03 £m £m Assets Liquid assets 1,622.8 1,534.5Loans and advances to customers 7,753.2 7,344.6Fixed assets 30.4 29.0Other assets 36.5 28.4Total assets 9,442.9 8,936.5 Liabilities Shares 6,558.3 6,457.0Borrowings 2,314.9 1,978.8Other liabilities 26.5 22.3Subordinated liabilities 64.8 35.0Subscribed capital 40.0 40.0Reserves 438.4 403.4Total liabilities 9,442.9 8,936.5 Cash Flow Statement Year Year Ended 31.12.04 Ended £m 31.12.03 £m Net cash inflow from operating activities 251.9 184.1Returns on investments and servicing of finance (8.3) (6.8)Taxation (15.8) (16.0)Capital expenditure and financial investment:Purchase of investment securitiesSale and maturity of investment securitiesPurchase of fixed assets (3,532.3) (3,467.7)Finance lease paymentsFinancing 3,306.3 3,266.8Issue of subordinated liabilities (7.5) (8.1) (0.3) (0.2) 29.8 -Increase/(decrease) in cash 23.8 (47.9) Notes to the accounts. (1) Includes interest added to the accounts. (2) Net interest margin, management expenses as a percentage of average assetsand profit before tax as a percentage of average assets have been calculated onthe basis of the average of the 2004 and 2003 total assets. This announcement will be sent to holders of the Society's Permanent InterestBearing Shares. Copies are available from the Society's Head Office: Coventry Building Society, Economic House, PO Box 9, High Street, Coventry. CV15QN. Contact : John Thomson FCMA, Deputy Chief Executive Telephone (0845) 7665522 www.coventrybuildingsociety.co.uk The Society is authorised and regulated by the Financial Services Authority. The Society introduces only to Norwich Union Marketing Group, members of whichare authorised and regulated by the Financial Services Authority for lifeassurance, pensions and investment. Member of the Building Societies Association. Shares and Deposits are Trusteeinvestments. For more information or additional comment please contact: Yvonne White, Media Relations Manager on 0870 607 7727 or out of hours 07790880880 Telephone calls may be monitored or recorded for your protection or for trainingpurposes. This information is provided by RNS The company news service from the London Stock Exchange