A resilient operational and capital performance

The Society has delivered a resilient performance. It has been open for business throughout the pandemic, increasing member satisfaction and delivering continued excellent service. It has continued to grow, increasing mortgage balances by £0.8bn. The strength of the Society's savings proposition is shown by the £103m additional savings interest it returned to members by paying higher than market rates². The Society remains committed to providing long term value, great service and a secure home for its members' savings.

As a mutual building society the organisation is run in the long term interest of members, with prudence and resilience being key parts of this. The reduction in the Bank of England base rate significantly impacts mortgage earnings and investment returns and as a result the Society has had to make difficult decisions on savings rates to balance the impact on margin. Due to the worsening economic outlook and the potential for higher unemployment £39m of additional provisions have been set aside to mitigate the risk of future credit losses.

Whilst costs have increased marginally, the Society remains one of the most cost efficient building societies in the UK, reducing its cost to mean assets ratio to 0.47%⁶, amongst the lowest in the sector. Investment in the business has continued during the year and cost efficiency continues to be a key strategic focus.

The Society maintained its capital strength. Common Equity Tier 1 ratio remains strong at 31.7% and the Leverage Ratio⁵ has been maintained at 4.5% - both being well above the regulatory minimum requirement. Together with a Liquidity Coverage Ratio of 200% these underline the Society's core strength and ability to focus on the long term benefit of its members.

Delivering for members, colleagues and the communities we serve

Over 90% of branches have been open throughout lockdown. During the toughest times, the average call waiting time across the Society was just over 3 minutes⁹ and this reduced to 21 seconds in May - an incredible achievement by colleagues. We also helped over 25,000 members use our services online for the first time.

The Society has implemented flexible working practices and retrained colleagues to ensure that it meets its service promise to members and satisfaction, judged by Net Promoter Score³, was higher than the same period last year. The close relationship the Society has with members has meant it was able to contact some of the most vulnerable and help them when isolated and shielding.

The Society has supported over 37,000 borrowers through payment holidays, making a difficult time a little easier for those whose income has reduced in recent months. I am particularly proud of the way colleagues adapted and worked together tirelessly to provide a high quality service to members when they needed it most, including launching a new online application for payment holidays. Whilst it is still early days I am also encouraged by the high numbers of borrowers who have restarted their mortgage payments over the last few weeks.

The Society has kept colleagues safe too. No-one has been furloughed and 60% of colleagues have been working from home, supported by new technology and flexible working practices - including over 14,000 hours of paid leave for those with caring responsibilities. The wellbeing of colleagues, whether serving members in branches or adapting to working from home, continues to be a critical part of our response to the pandemic.

The Society has actively supported national and local charities, providing emergency funding and focusing on both the immediate needs of the vulnerable through support for local foodbanks and donations of PPE, and the consequences of the pandemic through long-standing partnerships with Coventry Citizens Advice Bureau and Coventry Haven - a domestic violence charity. Its successful schools programme has been re-focussed, providing stationery packs and books to over 2,000 disadvantaged primary school students to support home learning. The continued support of the Royal British Legion resulted in donations of £400k to the charity in the first half of the year, taking total donations to £18.3m making a meaningful difference to the charity and the fantastic work it does.

Investing for the future

Despite the challenges of Covid-19, the Society has made substantial progress in developing its technology infrastructure and completed significant migrations to new data centres. In June, it delivered a project to allow stronger online authentication, a significant deliverable in the Society's digital journey and important with more members looking to manage their money online - a trend that has been accelerated by the pandemic. The branch refurbishment programme continued up to lockdown with a further 3 completed bringing the total to 29. In addition, the Society is on track to deliver a new HR system in September to underpin the investment in its greatest asset, its people.

Investing in digital capability for both mortgages and savings will be a key focus for the Society over the coming months as it seeks to build on its brilliant personal service in an increasingly digital world.

Commenting on these results, Steve Hughes, Chief Executive, Coventry Building Society, said:

"I joined the Society on the 20^th April with Covid-19 impacting all parts of the Society and affecting our members, customers, colleagues and the communities in which we operate. It has dominated the first half of the year.

We responded quickly to keep members and colleagues safe and stayed open for business. Managing the competing needs of savers, borrowers and those in financial difficulty has been challenging. I'm confident we've made the right decisions, even if difficult at times, balancing the needs of our savers and borrowers, maintaining the financial stability of the Society and continuing to invest for the future, all with the aim of protecting the long term interests of our members.

Outside of the Society, the efforts to control the pandemic have been immense and I would like to thank every key worker in the UK for what they have done for us during this time, the spirit and hard work shown by so many has been great to see. I extend this to all of my colleagues at the Society for their fantastic efforts on behalf of our members during these very challenging times."