The pandemic meant the society’s mortgage book decreased to £658m, down from £696m in 2019.
This was because of cautious management and tightening its risk appetite by reducing exposure to higher LTV lending according to the society.
However, the mutual was able to grow its reserves and strengthen its balance sheet position.
Profit before tax fell to £0.56m, down from £0.60m in the previous year, which the society says is mainly due to increased impairment charges for loans and advances to customers due to the impact of COVID-19 on borrowers’ ability to meet their mortgage payments.
Higher administrative expenses from COVID related practices and, in the prior year, a gain from the sale of the society’s previous head office building also impacted profit before tax levels.
Colin Fyfe, chief executive at Hinckley & Rugby, said: “With a blend of staff working across branches, in our head office and at home, we’ve been able to maintain our service throughout restrictions, providing essential banking for customers and extra support for brokers.
“Investment in digital services has been extremely beneficial to us and our members during COVID-19, and part of the reason why we have been successful in our response to the pandemic.
“Being there for the community is something which is always important to us, which is why our staff found new ways to give back and were able to increase their volunteering hours through online sessions with schools and organisations.
“Throughout the pandemic, I’m proud to say that the team has made over 2,500 welfare calls to customers to check on how they are coping with the uncertainty.
“For the wider community, we teamed up with local radio station, Fosse 107, as a sponsor for a ‘Money Matters’ segment – in which I answered listeners’ questions on their financial worries.”
The mutual’s ‘Mortgage Support Promise’ was introduced during the pandemic, allowing members to take a mortgage payment break.
This has benefitted approximately 10% of the society’s mortgage members and only a small number of customers have needed longer-term support.
Fyfe added: “We’re always ready to help our members, which is why we have been working closely with customers who have been experiencing difficulties, to find affordable solutions for their financial worries.
“Despite the uncertainty everyone has faced in the past year, our financial performance has been strong and we have held our profit levels flat, even though we had a range of additional costs.
“We invested in new systems and resource, taking on 25 new starters and avoiding furloughing a single team member or accessing any COVID-19 government grants.”
The society says it is optimistic about 2021 and is holding a virtual Annual General Meeting later in the month.
