Final Results

Coventry Building Society 
21 February 2006



A year of outstanding success for the Coventry


Coventry Building Society, the UK's fifth largest building society, today
announces outstanding results for the year ended 31 December 2005 - one of its
best ever years.


Highlights


• Record gross lending of just over £3 billion - up £811 million on
  2004

• Record net lending of £1.3 billion - 64% above 'natural' market share

• Savings' balances increased by £897 million - 42% above 'natural'
  market share

• Growth in total assets of 17.5% to over £11 billion

• Management expenses ratio reduced to 0.57% of average assets - the
  best ratio of any building society

• Profit before tax increased by £2.1 million to £53.7 million

• Over 76,000 new customers bringing total membership to over one
  million


For the first time, these annual results have been prepared under International
Financial Reporting Standards (See Editors' Notes).


Commenting on the Society's performance, Martin Ritchley, Chief Executive said:
'The mortgage and savings' markets remained as competitive as ever in 2005;
however, despite this, the Society achieved an unprecedented level of new
lending - just over £3 billion, significantly ahead of last year's £2.2 billion.
As a result, our mortgage balances increased by a record £1.3 billion, 64%
above our 'natural' market share.  This is a particularly impressive performance
against the background of a more subdued housing market.


'The continued high levels of employment and comparatively low interest rate
environment have sustained mortgage repayments and kept arrears' levels low.
Even against that background, the Society's mortgage arrears remain less than
half the industry average, reflecting the high quality of our mortgage book.


'The Society was equally successful in attracting new savings' customers, with
retail funding balances increasing by £897 million, 42% above our 'natural'
market share.  This very strong performance on both sides of our business
enabled total assets to grow by 17.5% to £11.1 billion - a result we confidently
expect to be amongst the best in the building society sector.


'Once again, our success has been built upon the advantages which our building
society status bring and our focus upon delivering ongoing benefits to a growing
number of members.  Our net interest margin (principally the difference between
the interest we earn from borrowers and the interest we pay to savers) at 0.96%
of average assets remains one of the narrowest in the financial services sector
demonstrating our ongoing commitment to members.


'The management expenses ratio reduced for the tenth successive year to 0.57% of
average assets, maintaining our position as the most cost efficient building
society in the country.  Our growth and cost efficiency helped us to achieve an
increase of £2.1 million in pre-tax profit, which amounted to £53.7 million,
even after charging £2.9 million for loan impairment provisions.  The increased
profit contributed to our strong capital ratios.


'Without doubt, the innovative approach we adopted to both existing and new
customers contributed to our success, with Coventry Building Society being at
the forefront in the development of new savings' and mortgage products.  Our
Family 1st account, designed to encourage savings from families in receipt of
child benefit, and our very successful Sixty-Plus range of savings' accounts,
both achieved widespread acclaim as well as bringing a substantial number of new
customers to the Society.


'Our results for 2005 are truly outstanding.  As a building society committed to
putting members first, our performance reflects the winning formula we have
developed to deliver commercial success as well as member satisfaction.  Our aim
is to grow the Society for the benefit of saving and borrowing members and our
results demonstrate that we can look forward to the future with confidence.'






Editors' Notes


• Martin Ritchley, Chief Executive is available for interview and
  comment

• Photographs of Martin Ritchley can be downloaded from the Media Room
  at www.coventrybuildingsociety.co.uk or from www.headlinemoney.co.uk


• Full results and comparison with 2004 are attached - most of the
changes under IFRS are applied retrospectively from the start of 2004 and are
fully reflected in the restated financial statements for that year.  However the
standards that apply to financial instruments, IAS 32 Financial Instruments:
Disclosure and Presentation and IAS 39 Financial Instruments: Recognition and
Measurement, are being implemented from 1 January 2005 without restatement of
the 2004 comparatives.  These are the two standards that have the most
significant impact on a retail financial services organisation such as the
Society.  Therefore, the 2004 results and position at the end of the year are
not directly comparable with the 2005 figures.  A full explanation of the impact
of the transition to the IFRS will be given in the Annual Report and Accounts.






Coventry Building Society

                 Results for the year ended 31st December 2005

Key Results                               Year Ended                Year Ended
                                            31.12.05                  31.12.04
                                                              (as restated)(1)

                                                  £m                        £m

Pre tax profits                                 53.7                      51.6

Provisioning                                     2.9                       0.4

Gross lending                                  3,009                     2,198

Net lending                                    1,326                       409

Net receipts from shares (2)                     897                       101

Total assets                                  11,090                     9,440



Key Ratios                                Year Ended 31.12.05        Year Ended
                                                                      31.12.04
                                                        %      (as restated)(1)
                                                                           %

Asset growth                                        17.48                 5.69

Commercial asset growth                             17.10                 5.56

Gross capital                                        5.70                 6.10

Free capital                                         5.54                 6.02

Net interest margin                                  0.96                 0.95

Management expenses to average assets                0.57                 0.59

Profit before tax to average assets                  0.52                 0.56





Income Statement                      Year Ended 31.12.05            Year Ended
                                                                       31.12.04
                                                      £m       (as restated) (1)
                                                                            £m

Net interest receivable                              98.1                 87.0

Other income and charges                             17.2                 19.1

Gains less losses from derivative
financial instruments                               (0.6)                    -

Total income                                        114.7                106.1

Management expenses                                 (58.1)               (54.1)

Impairment losses on loans and advances              (2.9)                (0.4)

Profit before tax                                    53.7                 51.6

Tax                                                 (16.6)               (16.0)

Profit after tax                                     37.1                 35.6



Statement of Recognised Income &      Year Ended 31.12.05    Year Ended 31.12.04
Expense                                          £m                     £m

Profit for the year                                37.1                   35.6

Effect of adopting IAS 39 on 1
January 2005                                       (4.7)                     -

Actuarial losses on defined benefit pension plan   (6.1)                  (1.1)

Tax on actuarial losses loss on                    
defined benefit pension plan                        1.9                    0.3

Fair value movements taken to                       1.1                      -
reserves                                            

Tax on fair value movements taken                   
to reserves                                        (0.2)                     - 

                                                   
Net income recognised directly in
equity                                             (8.0)                  (0.8)

Total recognised income and
expense                                             29.1                   34.8



Balance Sheet                            As at 31.12.05         As at 31.12.04
                                                               (as restated) (1)
                                               £m                      £m

Assets

Liquid assets                                    1,952.2               1,622.8

Derivative financial instruments                    15.4                     -

Loans and advances to customers                  9,078.8               7,753.2

Tangible and intangible fixed assets                30.0                  30.4

Other assets                                        13.6                  33.3

Total assets                                    11,090.0               9,439.7


Liabilities                                      

Shares                                           7,455.4               6,558.3

Borrowings                                       2,984.5               2,314.9   

Derivative financial instruments                    15.4                     -

Other liabilities                                   39.5                  25.6


Subordinated liabilities                            90.6                  65.4


Subscribed capital                                  41.6                  41.6


Total liabilities                               10,627.0               9,005.8

Equity

General reserve                                    463.0                 433.9

Total liabilities & equity                      11,090.0               9,439.7



Cash Flow Statement                   Year Ended 31.12.05           Year Ended
                                                                      31.12.04
                                                    £m         (as restated) (1)
                                                                         £m

Cash flows from operating
activities                                          218.0                227.8

Cash flows from investing                           
activities                                         (160.8)              (233.8)

Cash flows from financing
activities                                           25.0                 29.8

Net increase in cash                                 82.2                 23.8

Cash and cash equivalents at the
start of the period                                  50.7                 26.9

Cash and cash equivalents at the end                 
of the period                                       132.9                 50.7

Notes to the accounts.

(1)  2004 comparatives have been restated on adoption of International Financial
     Reporting Standards.  An explanation of the effect of adoption on the 2005 
     and 2004 results is contained in the full Report and Accounts.

(2)  Includes interest added to the accounts.


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


For more information or additional comment please contact:

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

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


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.







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