Final Results
21 Februar 2006 - 8:30AM
UK Regulatory
RNS Number:6574Y
Coventry Building Society
21 February 2006
A year of outstanding success for the Coventry
Coventry Building Society, the UK's fifth largest building society, today
announces outstanding results for the year ended 31 December 2005 - one of its
best ever years.
Highlights
* Record gross lending of just over #3 billion - up #811 million on
2004
* Record net lending of #1.3 billion - 64% above 'natural' market share
* Savings' balances increased by #897 million - 42% above 'natural'
market share
* Growth in total assets of 17.5% to over #11 billion
* Management expenses ratio reduced to 0.57% of average assets - the
best ratio of any building society
* Profit before tax increased by #2.1 million to #53.7 million
* Over 76,000 new customers bringing total membership to over one
million
For the first time, these annual results have been prepared under International
Financial Reporting Standards (See Editors' Notes).
Commenting on the Society's performance, Martin Ritchley, Chief Executive said:
"The mortgage and savings' markets remained as competitive as ever in 2005;
however, despite this, the Society achieved an unprecedented level of new
lending - just over #3 billion, significantly ahead of last year's #2.2 billion.
As a result, our mortgage balances increased by a record #1.3 billion, 64%
above our 'natural' market share. This is a particularly impressive performance
against the background of a more subdued housing market.
"The continued high levels of employment and comparatively low interest rate
environment have sustained mortgage repayments and kept arrears' levels low.
Even against that background, the Society's mortgage arrears remain less than
half the industry average, reflecting the high quality of our mortgage book.
"The Society was equally successful in attracting new savings' customers, with
retail funding balances increasing by #897 million, 42% above our 'natural'
market share. This very strong performance on both sides of our business
enabled total assets to grow by 17.5% to #11.1 billion - a result we confidently
expect to be amongst the best in the building society sector.
"Once again, our success has been built upon the advantages which our building
society status bring and our focus upon delivering ongoing benefits to a growing
number of members. Our net interest margin (principally the difference between
the interest we earn from borrowers and the interest we pay to savers) at 0.96%
of average assets remains one of the narrowest in the financial services sector
demonstrating our ongoing commitment to members.
"The management expenses ratio reduced for the tenth successive year to 0.57% of
average assets, maintaining our position as the most cost efficient building
society in the country. Our growth and cost efficiency helped us to achieve an
increase of #2.1 million in pre-tax profit, which amounted to #53.7 million,
even after charging #2.9 million for loan impairment provisions. The increased
profit contributed to our strong capital ratios.
"Without doubt, the innovative approach we adopted to both existing and new
customers contributed to our success, with Coventry Building Society being at
the forefront in the development of new savings' and mortgage products. Our
Family 1st account, designed to encourage savings from families in receipt of
child benefit, and our very successful Sixty-Plus range of savings' accounts,
both achieved widespread acclaim as well as bringing a substantial number of new
customers to the Society.
"Our results for 2005 are truly outstanding. As a building society committed to
putting members first, our performance reflects the winning formula we have
developed to deliver commercial success as well as member satisfaction. Our aim
is to grow the Society for the benefit of saving and borrowing members and our
results demonstrate that we can look forward to the future with confidence."
Editors' Notes
* Martin Ritchley, Chief Executive is available for interview and
comment
* Photographs of Martin Ritchley can be downloaded from the Media Room
at www.coventrybuildingsociety.co.uk or from www.headlinemoney.co.uk
* Full results and comparison with 2004 are attached - most of the
changes under IFRS are applied retrospectively from the start of 2004 and are
fully reflected in the restated financial statements for that year. However the
standards that apply to financial instruments, IAS 32 Financial Instruments:
Disclosure and Presentation and IAS 39 Financial Instruments: Recognition and
Measurement, are being implemented from 1 January 2005 without restatement of
the 2004 comparatives. These are the two standards that have the most
significant impact on a retail financial services organisation such as the
Society. Therefore, the 2004 results and position at the end of the year are
not directly comparable with the 2005 figures. A full explanation of the impact
of the transition to the IFRS will be given in the Annual Report and Accounts.
Coventry Building Society
Results for the year ended 31st December 2005
Key Results Year Ended Year Ended
31.12.05 31.12.04
(as restated)(1)
#m #m
Pre tax profits 53.7 51.6
Provisioning 2.9 0.4
Gross lending 3,009 2,198
Net lending 1,326 409
Net receipts from shares (2) 897 101
Total assets 11,090 9,440
Key Ratios Year Ended 31.12.05 Year Ended
31.12.04
% (as restated)(1)
%
Asset growth 17.48 5.69
Commercial asset growth 17.10 5.56
Gross capital 5.70 6.10
Free capital 5.54 6.02
Net interest margin 0.96 0.95
Management expenses to average assets 0.57 0.59
Profit before tax to average assets 0.52 0.56
Income Statement Year Ended 31.12.05 Year Ended
31.12.04
#m (as restated) (1)
#m
Net interest receivable 98.1 87.0
Other income and charges 17.2 19.1
Gains less losses from derivative
financial instruments (0.6) -
Total income 114.7 106.1
Management expenses (58.1) (54.1)
Impairment losses on loans and advances (2.9) (0.4)
Profit before tax 53.7 51.6
Tax (16.6) (16.0)
Profit after tax 37.1 35.6
Statement of Recognised Income & Year Ended 31.12.05 Year Ended 31.12.04
Expense #m #m
Profit for the year 37.1 35.6
Effect of adopting IAS 39 on 1
January 2005 (4.7) -
Actuarial losses on defined benefit pension plan (6.1) (1.1)
Tax on actuarial losses loss on
defined benefit pension plan 1.9 0.3
Fair value movements taken to 1.1 -
reserves
Tax on fair value movements taken
to reserves (0.2) -
Net income recognised directly in
equity (8.0) (0.8)
Total recognised income and
expense 29.1 34.8
Balance Sheet As at 31.12.05 As at 31.12.04
(as restated) (1)
#m #m
Assets
Liquid assets 1,952.2 1,622.8
Derivative financial instruments 15.4 -
Loans and advances to customers 9,078.8 7,753.2
Tangible and intangible fixed assets 30.0 30.4
Other assets 13.6 33.3
Total assets 11,090.0 9,439.7
Liabilities
Shares 7,455.4 6,558.3
Borrowings 2,984.5 2,314.9
Derivative financial instruments 15.4 -
Other liabilities 39.5 25.6
Subordinated liabilities 90.6 65.4
Subscribed capital 41.6 41.6
Total liabilities 10,627.0 9,005.8
Equity
General reserve 463.0 433.9
Total liabilities & equity 11,090.0 9,439.7
Cash Flow Statement Year Ended 31.12.05 Year Ended
31.12.04
#m (as restated) (1)
#m
Cash flows from operating
activities 218.0 227.8
Cash flows from investing
activities (160.8) (233.8)
Cash flows from financing
activities 25.0 29.8
Net increase in cash 82.2 23.8
Cash and cash equivalents at the
start of the period 50.7 26.9
Cash and cash equivalents at the end
of the period 132.9 50.7
Notes to the accounts.
(1) 2004 comparatives have been restated on adoption of International Financial
Reporting Standards. An explanation of the effect of adoption on the 2005
and 2004 results is contained in the full Report and Accounts.
(2) Includes interest added to the accounts.
This announcement will be sent to holders of the Society's Permanent Interest
Bearing Shares.
Copies are available from the Society's Head Office:
Coventry Building Society, Economic House, PO Box 9, High Street, Coventry, CV1
5QN.
Contact : John Thomson FCMA, Deputy Chief Executive
Telephone (0845) 7665522 www.coventrybuildingsociety.co.uk
For more information or additional comment please contact:
Yvonne White, Media Relations Manager on 0870 607 7727 or out of
hours 07790 880880
Telephone calls may be monitored or recorded for your protection or for training
purposes
The Society is authorised and regulated by the Financial Services Authority.
The Society introduces only to Norwich Union Marketing Group, members of which
are authorised and regulated by the Financial Services Authority for life
assurance, pensions and investment.
Member of the Building Societies Association. Shares and Deposits are Trustee
investments.
This information is provided by RNS
The company news service from the London Stock Exchange
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