Coventry Building Society advanced £6.7bn of mortgages last year, an 18% fall on a year ago, as the mutual reacted to loan margin pressure and its acquisition of the Co-operative Bank.   

Mortgage balances grew by 3%, or £1.5bn, to £51.8bn, while its overall share of the home loan market was unchanged at 3.1%. 

It added that £32.4bn of its mortgage assets comprised owner-occupier loans, up 4.9% from a year ago, while £19.4bn were buy-to-let loans, unchanged over the period. 

“The society took a conscious decision to moderate growth during the year as a result of continued economic uncertainty, pressure on mortgage margins and in anticipation of the acquisition of the Co-operative Bank,” it said in a financial statement. 

The mutual completed the acquisition of the Co-operative Bank for £780m in cash in January.

It pointed out that the purchase resulted in a £603m fair value net asset gain. 

It 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.” 

The business added: “While the impact of the cost-of-living challenges is less than previously expected, around a third of mortgage customers are still likely to be impacted by a future rate shock as they mature onto higher rate products.” 

Overall, the society posted pre-tax profit down 32% to £323m, which “was in line with expectations following an exceptional operating environment in 2023”. 

Coventry Building Society chief executive Steve Hughes 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.”