Final Results

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 31
December 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 increased
member 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 significantly
better than industry average


Commenting on the results, Martin Ritchley, Chief Executive said:


'Our results for 2004 represent another successful year for Coventry Building
Society. In a highly competitive market, we achieved gross mortgage lending of
almost £2.2 billion, the second best total in our history, as well as net
lending of £409 million. Our assets grew by over £500 million to total over £9.4
billion. For the ninth successive year, we have improved our cost ratio,
maintaining our position as the most cost efficient major building society in
the UK. These results reinforce the Coventry's position as, not only the fifth
largest, 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 its
momentum, reflecting the competitiveness of our mortgage products, for which we
were 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 the
interest we pay to savers) for the benefit of members. Last year was no
exception and the Society's net interest margin narrowed in 2004 from 1.03% to
0.95% of average assets.

'The Coventry's net interest margin is still one of the narrowest in the
industry and the fact that the Society can operate so effectively at this level
underlines the significant competitive advantage which we derive from our
building society status. Quite simply, we have no dividends to pay to external
shareholders, which means we can offer more competitive rates to borrowers and
savers 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%. An
important feature of this success was our ability to contain costs, whilst
making the necessary investment to achieve compliance with mortgage and general
insurance regulation. Although we achieved asset growth of almost 6%, our costs
increased by only 2% - less than the rate of inflation. This means we have made
savings in real terms, with our administrative expenses to average assets ratio
reducing again from 0.63% to 0.60% of average assets - the ninth successive year
of improvement. This maintains our position as the most cost efficient major
building society. We have also maintained the quality of our mortgage book. Our
arrears' performance was already better than the industry average, but in 2004
we have improved still further, with just three properties in possession at the
year end.


'Savings' balances increased by £101 million, to a record £6,558 million. Since
the year end, our innovative Family 1st Account, designed to encourage savings
from families in receipt of child benefit, has achieved widespread acclaim, as
well as a significant response from both new and existing customers.


'As a building society committed to putting members first, our results in 2004
reflect yet again that we have a formula to deliver commercial success. Our
results provide the firm foundation upon which to grow our business for the
benefit 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 and
comment

• Photographs of Martin Ritchley can also be downloaded from the photo
library on our website

• Coventry Building Society is currently the fifth largest building
society in the UK

• Awards in 2004 include 'Best Capped Rate Mortgage Provider' from
Moneyfacts, 'Best Online Lender' from Mortgage Magazine, 'Best Online Mortgage
Provider' from Your Money Direct, 'Best Self Certification Lender' from Mortgage
Advisor and Homebuyer Magazine, a 'Four Star Rating for Mortgage Lenders' at the
Financial Adviser Service Awards and Highly Commended Online Mortgage Lender
from 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           47.3
Provisioning                                                0.4            5.0
Gross lending                                             2,198          2,464
Net lending                                                 409            863
Net receipts from shares (1)                                101            244
Total assets                                              9,443          8,937



Key Ratios                                    Year Ended 31.12.04      Year
                                                                 %     Ended
                                                                      31.12.03
                                                                         %

Asset growth                                                  5.67       10.90
Commercial asset growth                                       5.56       13.31
Gross capital                                                 6.12        5.67
Free capital                                                  6.05        5.67
Net interest margin (2)                                       0.95        1.03
Management expenses to average assets (2)
                                                              0.60        0.63
Profit 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           87.6
Other income and charges                                   19.1           18.6
Total income                                              106.1          106.2
Management expenses                                       (55.0)         (53.9)
Provisions                                                 (0.4)          (5.0)
Profit before tax                                          50.7           47.3
Tax                                                       (15.7)         (14.1)
Profit after tax                                           35.0           33.2



There are no recognised gains and losses other than the profit for the financial
periods

Balance Sheet                           As at 31.12.04         As at 31.12.03
                                                    £m                     £m

Assets

Liquid assets                                    1,622.8              1,534.5
Loans and advances to customers                  7,753.2              7,344.6
Fixed assets                                        30.4                 29.0
Other assets                                        36.5                 28.4
Total assets                                     9,442.9              8,936.5

Liabilities

Shares                                           6,558.3              6,457.0
Borrowings                                       2,314.9              1,978.8
Other liabilities                                   26.5                 22.3
Subordinated liabilities                            64.8                 35.0
Subscribed capital                                  40.0                 40.0
Reserves                                           438.4                403.4
Total 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       184.1
Returns on investments and servicing of finance
                                                              (8.3)       (6.8)
Taxation                                                     (15.8)      (16.0)
Capital expenditure and financial investment:
Purchase of investment securities
Sale and maturity of investment securities
Purchase of fixed assets                                  (3,532.3)   (3,467.7)
Finance lease payments
Financing                                                  3,306.3     3,266.8
Issue 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 assets
and profit before tax as a percentage of average assets have been calculated on
the basis of the average of the 2004 and 2003 total assets.


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 [phone] 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 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.


For more information or additional comment please contact:

Yvonne White, Media Relations Manager on 0870 607 7727 or out of hours 07790
880880

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purposes.






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