Annual report and accounts 2009 (PDF) - Coventry Building Society

NOTES TO THE ACCOUNTS(continued)22. LOANS AND ADVANCES TO CUSTOMERS (continued)Maturity analysisThe remaining maturity of loans and advances to customers at the balance sheet date is as follows:Group Society Group Society2009 2009 2008 2008£m £m £m £mIn not more than one year 56.5 50.9 62.5 59.9In more than one year 14,041.6 11,364.1 13,131.2 11,161.314,098.1 11,415.0 13,193.7 11,221.2Impairment (note 13) (23.4) (17.8) (20.9) (18.3)(note 40) 14,074.7 11,397.2 13,172.8 11,202.9The maturity analysis is based on contractual maturity not actual redemption levels experienced by the Group or Society.Covered bondsOn 21 April 2008, the Bank of England launched its Special Liquidity Scheme (SLS) which allows financial institutions toswap their high quality mortgage-backed and other securities for UK Treasury Bills for a defined period. In common withmany banks and building societies, the Society has used this facility as an efficient way of maintaining a high level ofliquidity.The Society accessed the SLS by issuing a covered bond and swapping this with the Bank of England for UK Treasury Bills.To establish this structure the Society created a new entity, Coventry Building Society Covered Bonds LLP, which isconsolidated by the Group.Loans and advances to customers include £2,602.6 million (2008 – £2,790.4 million) for both the Group and Society whichhave been transferred from the Society to Coventry Building Society Covered Bonds LLP. The loans secure £2,000.0 million(2008 – £2,000.0 million) of covered bonds issued by the Society. The loans are retained on the Society’s balance sheet as theSociety retains substantially all the risks and rewards relating to the loans.23. INVESTMENTS IN SUBSIDIARY UNDERTAKINGSTotalSociety Shares Loans 2009£m £m £mCost and net book valueAt 1 January - 4,769.5 4,769.5Additions - 544.0 544.0At 31 December - 5,313.5 5,313.5The Society holds 100% of the issued share capital of Godiva Mortgages Limited, an operating subsidiary undertakingincorporated in England and Wales whose principal activity is mortgage lending.The Society also has an interest in Coventry Building Society Covered Bonds LLP that gives rise to risks and rewards that arein substance no different than if it was a subsidiary undertaking. As a consequence this entity is consolidated in the Groupaccounts. Coventry Building Society Covered Bonds LLP is registered in England and Wales. Its principal activity is intragroupmortgage acquisition and guarantor of covered bonds issued by Coventry Building Society.Notes 4 and 5 of the Annual Business Statement include details of all the Society’s subsidiary undertakings.56