Half Year Results

Coventry Building Society 
19 August 2003

Embargoed until 0730 hours

19 August 2003



Coventry hits record lending at half year



Coventry Building Society, the UK's fifth largest building society, today
announces another set of outstanding results for the six months ended 30 June
2003.



Key highlights for the half year include:



  Record gross mortgage lending of £1,235 million - 26% up on the first half of
  2002

  Record net lending of £573 million - well above 'natural' market share

  Over 14% annual asset growth

  Interest margin narrowed to 1.00% of average assets for benefit of members

  Improved management expenses to average assets - down to 0.64%

  Pre-tax profit up 4.9% to £21.4 million



Martin Ritchley, Chief Executive of Coventry Building Society said:  'Once again
I am delighted to report a successful set of half year results which continue to
build upon the consistently strong performance we've been able to report over
many years.  Our results demonstrate the competitive advantage of our building
society status, with our assets growing by over 14% in the year to 30 June 2003.
We continue to reduce our management expenses ratio, down from 0.66% of
average assets a year ago to 0.64%, underpinning our position as one of the most
cost efficient lenders in the UK.





                                                                         More...

Continuing ...



'Our established position as a low cost provider is reinforced by our status as
a building society, with no dividends to pay to outside shareholders.  This has
enabled us to narrow our interest margin to 1.00% of average assets, for the
benefit of our saving and borrowing members.



'Gross mortgage advances, at £1,235 million, is a new record for the Society -
26% up on the same period last year.  Net lending (gross advances less capital
repayments) of £573 million, also a record, is well ahead of our 'natural'
market share. This performance demonstrates the success of our multi-channel
approach to distribution, which has enabled us to grow our mortgage book by over
12% in the year to June 2003.



'In 2002, we achieved record net savings receipts of more than £1 billion.  This
outstanding performance meant that attracting significant new savings receipts
has not been our priority; nevertheless £29 million was attracted in the half
year.



'Our assets now total over £8.5 billion, maintaining our position as one of the
top five building societies.  These are impressive results which continue to
demonstrate the competitive advantages which flow from our building society
status and the benefits which we are able to deliver to our members.'



                                      ends



Notes to Editors

•    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

•    Results for the half year ended 30 June 2003 are attached

                           Unaudited Society Results

                      For the half year ended 30 June 2003


Key Results                                                 Half Year           Year        Half Year 
                                                               Ended           Ended       Ended   
                                                              30.06.03       31.12.02       30.06.02    
                                                                 £m              £m              £m
                                                                           
Pre tax profits                                                21.4              45.3            20.4
Mortgage provisioning                                           2.7               2.9             1.8
Gross lending                                                 1,235             1,865             981
Net lending                                                     573               677             471
Net receipts from shares (1)                                     29             1,035             377
Total assets                                                  8,546             8,058           7,468




Key Ratios                                                    Half Year           Year        Half Year 
                                                                 Ended           Ended         Ended          
                                                              30.06.03        31.12.02         30.06.02 
                                                                 %               %                 %
Asset growth                                                   6.06             12.30            4.07
Commercial asset growth                                        8.84             11.66            8.13
Gross capital                                                  5.71              5.87            6.11
Free capital                                                   5.71              5.81            6.16
Net interest margin (2)                                        1.00              1.05            1.03
Management expenses to average assets (2)                      0.64              0.65            0.66
Profit before tax to average assets (2)                        0.52              0.59            0.56



Income and Expenditure Account                               Half Year         Year         Half Year 
                                                              Ended           Ended           Ended
                                                            30.06.03         31.12.02        30.06.02
                                                                £m               £m             £m
Net interest receivable                                        41.3              80.0            37.4

Other income and charges                                        9.2              18.0             8.9
Total income                                                   50.5              98.0            46.3

Management expenses                                          (26.4)            (49.8)          (24.1)

Provisions for bad and doubtful debts                         (2.7)             (2.9)           (1.8)

Profit before tax                                              21.4              45.3            20.4

Tax                                                           (6.7)            (14.2)           (6.4)

Profit after tax                                               14.7              31.1            14.0




Statement of total recognised gains and losses               Half Year         Year        Half Year 
                                                              Ended           Ended        Ended         
                                                            30.06.03        31.12.02      30.06.02
                                                                £m            £m            £m
                                                                          

Profit for the financial period                                14.7              31.1            14.0

Prior year adjustment (3)                                         -               2.4             2.4

Total gains and losses recognised since last annual            14.7              33.5            16.4
report




                                                               As at            As at       As at 
Balance Sheet                                                 30.06.03       31.12.02     30.06.02         
                                                                  £m            £m          £m
Assets

Liquid assets                                               1,435.4           1,521.2         1,141.5

Mortgages                                                   7,054.7           6,481.6         6,277.0

Fixed assets                                                   27.3              28.6            26.4

Other assets                                                   28.8              26.5            23.3

Total assets                                                8,546.2           8,057.9         7,468.2

Liabilities

Shares                                                      6,242.0           6,213.2         5,555.2

Borrowings                                                  1,811.6           1,368.9         1,446.4

Other liabilities                                              32.8              30.6            38.5

Subordinated liabilities                                       35.0              35.0            35.0

Subscribed capital                                             40.0              40.0            40.0

Reserves                                                      384.8             370.2           353.1

Total liabilities                                           8,546.2           8,057.9         7,468.2




Cash Flow Statement                                           Half Year         Year        Half Year 
                                                               Ended           Ended        Ended
                                                              30.06.03        31.12.02     30.06.02
                                                                £m              £m           £m
Net cash inflow from operating activities                      81.9             194.3          (28.7)

Returns on investments and servicing of finance               (3.9)             (5.9)           (2.9)

Taxation                                                      (7.7)            (17.7)           (6.0)

Capital expenditure and financial investment:

   Purchase of investment securities                      (1,917.9)         (2,549.0)         (984.7)

   Sale and maturity of investment securities               1,934.7           2,397.0           976.2

   Purchase of fixed assets                                   (1.7)             (5.7)           (0.8)

   Finance lease payments                                     (0.2)             (0.4)           (0.1)

Financing

   Issue of subordinated liabilities                              -              15.0            15.0

Increase/(decrease) in cash                                    85.2              27.6          (32.0)


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 an annualised basis taking into account the number of days in the six 
    month period.

(3) The prior year adjustment reflects a change of accounting policy on adoption 
    of FRS 19 Deferred Tax.



For more information or additional comment please contact

John Thomson FCMA, Deputy Chief Executive

On [phone]

Visit our websites: www.coventrybuildingsociety.co.uk    www.Remortgages.co.uk

Telephone calls may be monitored or recorded for your protection or for training
purposes

Coventry Building Society introduces only to Norwich Union Marketing Group,
members of which are regulated by the Financial Services Authority, for life
assurance, pensions and investments.




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