The 171-year-old society's half year pre-tax profit figure was down from £5.5 million a year before to £2.9m.
Chief executive Jonathan Westhoff said: "Set against the challenges of operating in full lockdown for half of the period, I’m pleased to report the society has delivered a robust first half performance. Throughout this period, we have been focusing on prioritising the wellbeing of our members, colleagues and communities, remaining operationally and financially resilient and ensuring our products, services and premises are safe and accessible."
The new mortgage lending was £3m less than a year before with with 48 per cent of new mortgages going to first-time buyers.
It was the first lender to launch a new mortgage product proposition specifically designed to support mortgage prisoners, who have previously been trapped in paying higher rates due to strict borrowing criteria.
The society maintained its average rate for savers at 17 per cent above the market average, rising to 52 per cent above by the period end.
The profit figure was lower because of setting aside additional provisions for credit losses in respect of the anticipated economic impact arising from the Covid-19 pandemic.
Mr Westhoff said: "We responded to the first lockdown back in March by adapting our operating model to ensure we could maintain our high service standards. We did not place any employees on the furlough scheme, and ensured all employees were paid their full salary irrespective of whether they are required to work their full contractual hours. We supported home working for a high number of employees, and reduced the number of people working in our head office and branches to enable social distancing.
"A priority was to support our most financially vulnerable borrowers, and help them access a payment deferral and other specific support measures if required. We set up a dedicated team to support these customers, and as of September 30, 14 per cent of all our residential mortgages had taken a payment deferral. For those that had reached the end of their initial payment deferral, 84 per cent had either restarted their monthly payments or redeemed their mortgage, with 16 per cent requiring an extension, representing two per cent of total residential mortgages outstanding.
"Our activity in the mortgage market, after a relatively short hiatus at the start of the first lockdown, recovered strongly. The knock on effects of a pause in the housing market mean that gross lending for the six months to September does not accurately reflect the true strength of our performance; compared with the same period last year, our application volumes were up 39 per cent to £563m.
"Although we took the responsible approach to limiting the amount of high loan to value lending, this did have an impact on the volume of first-time buyer activity. This segment of the market, however, is still at the heart of our purpose and we were able to support a further 699 first-time buyers to become homeowners in the six months to September 30."
Mr Westhoff said that with the Bank of England base rate at an all-time low of 0.10 per cent, and the prospect of the rate potentially turning negative, savers hade been hit hard by the pandemic with savers’ rates at extremely low levels.
"Despite this, throughout the first six months of the year, the society has continued to help savers by paying average rates some 17 per cent above the market average; this had increased to 52 per cent by September 30. In monetary terms, this means the society has paid an additional annualised £2.6m in interest and equivalent to £5.7m using the period end rates. While this is lower than previous years, this is reflective of our duty to balance the needs of savers and borrowers.
"An area that has been hit hard by the pandemic is the third sector, with donations and fundraising levels falling due to the lockdown restrictions. As a mutual, supporting the communities in which we operate is a core part of our ethos, and we were able to channel our fundraising efforts to helping groups most in need as a result of the pandemic. This includes donations to local food banks, care packages to new mothers at Walsall Manor Hospital, and colleagues volunteering to provide hot meals to the homeless. We also raised £30,000 to support the Midlands Air Ambulance to support the vital, lifesaving work they do across the region."