Exceptional service levels helped Coventry Building Society deliver a strong set of results for 2022.
The Society, having moderated mortgage growth in the first half of the year, grew by 6% in the second half as consumer demand spiked in the rising rate environment. The full year growth of 3% took overall mortgage assets to £48bn. This was complemented by a strong performance for the Society’s savings business, with thousands more visits to branches and calls to the savings contact centre.
The Society’s mortgage teams experienced some of the busiest days on record, with Intermediary Support Team responding to 278,000 broker queries throughout the year, answering the phone or replying on web chat within two and a half minutes on average. BDMs and Telephone BDMs continued to build strong relationships with intermediary partners, whilst the Society’s existing mortgage customer teams also provided a quick and straightforward option for borrowers, answering around 450,000 calls to facilitate a range of different service requests.
The rising interest rate environment increased demand from brokers and their clients for reliable service and competitive products. The Society regularly updated its offer to borrowers with new mortgage products, including new propositions for first time buyers and new build, to help keep pace with market demand throughout the year that at points led to £400m of applications per day.
Steve Hughes, Chief Executive of Coventry Building Society, said: “Our strong performance last year was built on the high levels of customer and broker service, in person, online and on the phone. In a year with many challenging moments, our people delivered the consistent value and outstanding service experience that our customers expect.
“Our intermediary partners played a critical role in this performance. In a year of so much disruption, their advice has never been needed more and we really value the support brokers have given us throughout the year. We’re proud to have supported the market through thick and thin in 2022 with a service that brokers can rely on, backed by a range of consistently competitive products and underpinned by our intermediary pledges, including the 48 hours’ notice of product withdrawal.
“We’ve made significant investment in our digital infrastructure, including the launch of our digital switching service. But the need for a human touch, whether face to face or over the phone, is still very strong. Our BDMs, Telephone BDMs and Intermediary Support Team have built strong relationships up and down the UK with brokers and their teams and our direct to consumer support through our mortgage teams continues to deliver great results.
“I also want to call out the hard work and commitment of my colleagues. We’re proud to be named as one of the UK’s Great Places to Work with further awards for wellbeing and as a workplace for women. Having an excellent workplace culture gives colleagues the best environment to develop and deliver the best outcomes for our customers, our partners our communities and each other.”
Results highlights:
Growing mortgages and savings
- Mortgage balances grew by £1.4bn (3%) to £48bn. We managed growth in a disciplined way during the year in a period which has seen significant market volatility.
- Savings balances grew by £2.4bn (6%) to £42.3bn. The Society delivered a very strong savings performance and once again paid higher savings rates than the market average, increasing this differential in 2022 to 0.62%, equivalent to an additional £230m in interest for our savers (2021: £201m)1.
Strong financial performance whilst investing in the future
- Profit before tax of £371m (2021: £233m). The rising interest rate environment supported an improved income performance with a net interest margin of 1.16% (2021: 0.90%) even after offering better rates to savers and protecting variable rate mortgage customers from the full increase in the Bank of England Rate.
- The Society’s Leverage Ratio increased to 5.2% (2021: 4.8%). Stronger profitability has materially strengthened our capital position and resilience as we face into a weaker economic outlook. Although the Common Equity Tier 1 (CET 1) ratio remains well above statutory requirements at 27.4% there has been a reduction from 2021 (36.2%) due to changes in industry-wide regulation.
- Very low and stable arrears balances of 0.17% of mortgages more than three months in arrears (2021: 0.17%)2. The credit quality of our mortgage book remains very strong although we are mindful of the potential impact on unemployment and house prices from a weaker economy and are monitoring and supporting mortgage customers who may experience payment difficulties.
- Our cost ratios remain strong and we are making significant investment in our future. We made good progress upgrading core infrastructure and investing in digital services, telephony and branches, providing increased choice and services for members, customers, employees and intermediary partners.
Market leading service and making a difference to the lives of members, colleagues, and communities
- Excellent customer service with Experience Net Promoter Score3 of +75 during a period of exceptional demand from customers and brokers. The Society also continues to report one of the lowest complaint overturn rates by the Financial Ombudsman Service at 3%.
- Increased community investment of £3.2m helping to tackle cost of living issues whilst maintaining focus on three priorities of homelessness, financial education/ employability and reducing loneliness.
- Recognised as a Great Place to Work. Improved position in Great Place to Work survey as Colleague Trust Index increased to +77 from +73.
