The society’s annual results showed the fall in value from £696.0 million in 2019 as it tightened its risk appetite by reducing exposure to higher loan-to-value lending.

However, even with the dip in the mortgage book and despite additional costs incurred during the challenging year the building society maintained profit levels.

What’s more the mutual said it was able to grow its reserves and strengthen its balance sheet position.

Retail savings grew from £677.3 million in 2019 to £690.2 million and net interest income grew to £9.31 million, up from £9.10 million in 2019.

Profit before tax fell to £0.56 million, down from £0.60 million in the previous year, 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-19 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.

Hinckley & Rugby Building Society said, like many other organisations, it had seen significant changes to business due to the pandemic.

Colin Fyfe, CEO of the society, 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.”

Indeed, during the pandemic, the society’s teams made over 2,500 welfare calls to customers to check on how they are coping with the uncertainty.

Mortgage support promise

It also introduced a Mortgage Support Promise, which allowed members to take a payment break, a move which benefitted around 10% of the society’s mortgage members. Only a small number of customers 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.”