Coventry Building Society Group has posted a significant rise in profits for the first half of 2025, driven by its acquisition of The Co-operative Bank, in what chief executive Steve Hughes described as a “transformational year” for the mutual.

Statutory profit before tax soared to £722 million for the six months to 30 June 2025, up from £159 million in the same period last year.

The headline figure includes a £584 million gain related to the purchase of The Co-operative Bank, reflecting the fact that the agreed price was more than 40% below the fair value of the bank’s net assets.

Excluding one-off items, underlying profit before tax rose to £200 million, up from £159 million a year earlier. Total underlying income climbed to £554 million, from £316 million in H1 2024, supported by a net interest margin of 1.24%, up from 1.05%.

The group’s underlying costs more than doubled to £345 million, largely due to the inclusion of £186 million in costs from the newly acquired bank. However, the Society’s standalone cost base remained flat at £158 million, excluding deal-related expenses.

LENDING

Lending activity reflected a strategic pause as the Society absorbed the impact of the acquisition and navigated a competitive low-margin environment. Excluding the effect of the bank purchase, Group lending balances were stable over the period.

Nevertheless, market share gains were notable: Coventry’s share of the UK mortgage market rose to 4.3%, from 3.1% at the end of 2024, while its savings market share grew from 2.7% to 3.3%. The deal also added 1.7% market share in current accounts.

The Society launched a new limited company buy-to-let proposition in April, targeting the private rental market. Early signs were positive, with a strong application pipeline in the three months following launch.

SAVINGS

Retail savings growth remained robust, with balances rising £2 billion to £62.8 billion on an organic basis. Coventry also maintained its strategy of offering member value, paying a £201 million premium over the market average during the period despite a softening base rate environment.

More than 40,000 personal current accounts were opened in the first six months, with net switching gains of nearly 10,000 accounts. The Group’s customer service metrics remained strong, with the Society posting a net promoter score of +76 and an average call wait time of 83 seconds.

Hughes said the Group was “focused on delivering the right outcomes” for customers and members, as it works to build a “purpose-led organisation that will stand out in UK financial services”.

The integration of The Co-operative Bank is progressing in line with expectations, the Group said, and the bank’s financial performance is meeting targets. Operational efficiencies and service levels are also improving, with average call response times at the bank now three times faster than they were in June 2024.

Coventry’s capital position remains strong despite the acquisition, with a CET1 ratio of 19.1% and a leverage ratio of 4.5%, both comfortably above regulatory requirements.

Looking ahead, the Society said it remained committed to delivering long-term value while managing capital prudently in a subdued lending environment.