Coventry Building Society sees drop in annual profits as interest rates fall

• Coventry Building Society’s annual profits fell to £349m from £474m

By HELEN KIRRANE

Updated: 11:12 GMT, 7 March 2025

Coventry Building Society saw a drop in its annual profit amid falling interest rates. 

The building society posted pre-tax profits of £349million for 2024 in its annual results today.

It marks a drop from the £474million in pre-tax profits it recorded in 2023.

Its net interest margin – the difference between the rates banks pay savers and charge borrowers – dropped to 1.07 per cent, compared to 1.26 per cent in 2023. 

This was due to mortgage and savings customers repricing onto lower margin products as the Bank of England base rate fell throughout the year.

But the mutual said mortgage balances grew by £1.5billion, up 3 per cent, to £51.8billion. While savings balances grew by £1.8billion, up 3.7 per cent, to £49.3billion. 

Down: Coventry Building Society posted annual profits of £349million for 2024 after its £780million takeover of Co-op Bank

This was helped by offering competitive rates to members and incentivising savings, for key groups including those saving for a first home. 

In February, it launched a best-buy easy-access savings rate paying 4.85 per cent, which has since been pulled.  

Coventry said: ‘We continued to pay higher rates than the market average, with the premium we pay members increasing from £342million to a record £401million.’

Coventry Building Society completed its £780million takeover of The Co-operative Bank on 1 January 2025, returning it to mutual ownership after more than a decade.

Yet the price tag was so low that Coventry paid a lot less for Co-op’s assets than they are now deemed to be worth.

The takeover resulted in a windfall of £603million for Coventry, due to the fair value of the net assets acquired exceeding the consideration paid.

Coventry said: ‘The acquisition will increase both the group’s mortgage and savings presence and extend our propositions into the personal current account and business banking markets.’ 

Coventry says that as it will take ‘several years’ to offer a joined-up service, Co-op Bank will operate separately for now.

Co-op Bank has 50 branches and will expand Coventry’s footprint outside the Midlands and south of England, into areas such as London and the North. Coventry has 64 branches.

Steve Hughes, chief executive of Coventry Building Society, said: ‘The Society has delivered another balanced and disciplined set of results, growing mortgages and savings ahead of the market, delivering the outstanding service and value our members expect, and continuing the strong financial performance that has underpinned the transformational acquisition of The Co-operative Bank on 1 January 2025.’

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Coventry Building Society sees drop in annual profits as interest rates fall

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