'Safe haven' Coventry BS pulls in £2.7bn

Almost a year after the collapse of Northern Rock, Britain's fourth-biggest building society, the Coventry, provided more evidence that consumers are flooding back to what they see as the safer havens of mutuals rather than the risk of smaller banks.

Coventry, which has recently come up with some of the widest ranges of mortgage and savings offers in the market, said it had attracted £2.7bn of extra savings in the year since the end of June 2007.

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That is a staggering 32% increase in its retail savings balance reflecting consumers' flight to safety.

At the same time, it has taken advantage of its weaker banking rivals, who have effectively shut their door to much new mortgage business.

In the last six months, the Coventry's mortgage and loan book rose £862m or 7% and its market share of net lending rose by 24% to three times its usual market share.

Chief executive David Stewart said that this represented a quarter of all new home loans that were made by building societies in the first half of 2008.

He added: 'The overwhelming majority of our lending continues to be in low-risk sectors. The average loan to value of our new lending was 57%, and we expect this figure to fall further in the second half.'

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