Interim Results

Coventry Building Society 
03 August 2004


Coventry announces excellent half year results


Coventry Building Society, the UK's fifth largest building society, has today
announced results which reflect an excellent performance for the first half of
2004.


Highlights

      Gross lending £1,132million (2003 - £1,235billion)

      Net savings receipts £112million (2003 - £29million)

      Net interest rate margin 0.96% (2003 - 1.00%)

      Other income increased to £10million (2003 £9.2million)

      Management expenses ratio reduced to 62p per £100 assets (2003 - 64p)

      Profit before tax up to £23.1million (2003 - £21.4million)


Year on Year

      Mortgage balances increased by 7%

      Retail savings balances grew by 5.2%

      Net interest receivable up by 4.4%

      Other income increased by 8.7%

      Profit before tax advanced by 7.9%


Commenting on the results, Martin Ritchley, Chief Executive said: 'The first
half of 2004 represents another very successful period for Coventry Building
Society. Whilst there is anecdotal evidence of a slow down in the housing
market, our gross lending totalled over £1.1billion, only slightly down on the
record achieved in the comparable period last year. On the other side of our
business, savings receipts totalled £112million - up £83million on the first
half of 2003. These results have enabled us to achieve annual growth in
commercial assets of over 7% and total assets of more than £9billion at the half
year end. I believe our performance will provide a strong platform for the
remainder of 2004 and beyond.'


'As a building society committed to delivering member value, we have again been
able to narrow our interest margin. At 0.96% of average assets, it remains one
of the narrowest in the financial services sector, reflecting the
competitiveness of our products and the commitment we continue to show to our
members' added Martin Ritchley.

Continuing, he said: 'The Society continues to maintain its prudent approach to
lending, which is reflected in the high quality of its mortgage book. Mortgage
arrears remain very low, with just four properties in possession; this has
enabled mortgage provisioning to be reduced to £2.1million for the six months.
At the same time, we have again improved our efficiency, with costs representing
0.62% of average assets - one of the best ratios in the sector. These factors, 
combined with improved other income of £10.0million, have enabled us not only 
to narrow our interest margin, but also to increase our pre tax profit to 
£23.1million - £1.7million up on the first half of 2003. Our increased profit 
has also contributed to an improved capital position, with the gross capital 
ratio increasing to 6.18%.


'Once again, in a highly competitive financial services market, our results are
excellent. They reflect the advantages of our building society status and
provide further evidence of our ability to compete successfully and to deliver
ongoing benefits to our members.'



Notes to Editors

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

• Photographs of Martin Ritchley can be downloaded from the photo 
library on our website

• Results for the half year ended 30 June 2004 are attached



For more information or additional comment please contact:

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

or email: [e-mail]


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



                           Unaudited Society Results

                      For the half year ended 30 June 2004

Key Results                    Half Year Ended      Year      Half Year Ended

                                       30.06.04     Ended             30.06.03

                                             £m    31.12.03                 £m

                                                         £m

Pre tax profits                            23.1        47.3               21.4
Mortgage provisioning                       2.1         5.0                2.7
Gross lending                             1,132       2,464              1,235
Net lending                                 205         863                573
Net receipts from shares (1)                112         244                 29
Total assets                              9,027       8,937              8,546



Key Ratios                     Half Year Ended      Year      Half Year Ended

                                       30.06.04     Ended             30.06.03

                                              %    31.12.03                  %

                                                          %

Asset growth                               1.01       10.90               6.06
Commercial asset growth                    2.78       13.31               8.84
Gross capital                              6.18        5.67               5.71
Free capital                               6.20        5.67               5.71
Net interest margin (2)                    0.96        1.03               1.00
Management expenses to average             0.62        0.63               0.64
assets (2)
Profit before tax to average               0.52        0.56               0.52
assets (2)

Income and Expenditure         Half Year Ended      Year      Half Year Ended
Account

                                       30.06.04     Ended             30.06.03

                                             £m    31.12.03                 £m

                                                         £m

Net interest receivable                    43.1        87.6               41.3
Other income and charges                   10.0        18.6                9.2
Total income                               53.1       106.2               50.5
Management expenses                       (27.9)      (53.9)             (26.4)
Provisions for bad and                     (2.1)       (5.0)              (2.7)
doubtful debts
Profit before tax                          23.1        47.3               21.4
Tax                                        (7.4)      (14.1)              (6.7)
Profit after tax                           15.7        33.2               14.7



There are no recognised gains and losses other than the profit for any of the
financial periods.




                                 As at 30.06.04      As at     As at 30.06.03

Balance Sheet                                 £m    31.12.03                £m

                                                          £m

Assets

Liquid assets                            1,411.7     1,534.5           1,435.4
Loans and advances to                    7,549.1     7,344.6           7,054.7
customers
Fixed assets                                29.5        29.0              27.3
Other assets                                36.7        28.4              28.8
Total assets                             9,027.0     8,936.5           8,546.2

Liabilities

Shares                                   6,569.4     6,457.0           6,242.0
Borrowings                               1,907.1     1,978.8           1,811.6
Other liabilities                           26.6        22.3              32.8
Subordinated liabilities                    64.8        35.0              35.0
Subscribed capital                          40.0        40.0              40.0
Reserves                                   419.1       403.4             384.8
Total liabilities                        9,027.0     8,936.5           8,546.2


Cash Flow Statement            Half Year Ended      Year      Half Year Ended

                                       30.06.04     Ended             30.06.03

                                             £m    31.12.03                 £m

                                                         £m

Net cash (outflow)/inflow from           (148.1)      184.1               81.9
operating activities
Returns on investments and                 (3.9)       (6.8)              (3.9)
servicing of finance
Taxation                                   (7.8)      (16.0)              (7.7)
Capital expenditure and
financial investment:
Purchase of investment                 (1,929.3)   (3,467.7)          (1,917.9)
securities
Sale and maturity of                    2,095.8     3,266.8            1,934.7
investment securities
Purchase of fixed assets                   (5.6)       (8.1)              (1.7)
Finance lease payments                     (0.2)       (0.2)              (0.2)
Financing
Issue of subordinated                      29.8           -                  -
liabilities
Increase/(decrease) in cash                30.7       (47.9)              85.2



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


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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