Coventry Building Society's net mortgage lending rose by a record 97% to £1.73bn last year, according to the provider's annual results.
Gross mortgage advances increased 44% to £4.22bn while savings balances grew 25.3%, to £10.3bn.
The society attributes the rise, which helped pre-tax profit rise 16.7% to £69.1m, to its low-risk strategy.
It handed more than three quarters of its mortgage advances, fully secured, to customers with an unblemished credit history for residential property. Meanwhile, it loaned less than 10% of advances to first time buyers.
The average loan-to-value ratio, adjusted for house price inflation, rose 1% to 45% in 2007. Unsecured loans represent less than 1% of total loans outstanding and unsecured lending in the year amounted to £55m, up from £45m last year.
The rise in net lending also follows the 2007 launch of Coventry’s specialist lending subsidiary, Godiva Mortgages, which operates through intermediaries. Coventry says the launch could have raised brand awareness to boost lending.
David Stewart, chief executive of Coventry Building Society, says: “There is no doubt that the environment was challenging, at times even hostile, for all mortgage lenders. However, our ability to attract retail savings and our focus on low risk lending means we were well placed to meet these challenges.”
In 2007 buy-to-let properties accounted for 14.4% of loans, with a loan-to-value ratio of no more than 65%. Coventry advanced another 7.9% to buy-to-let investors at loan-to-value ratios of between 65% and 85%.
Stewart also says the society has no exposure to credit losses arising from US mortgages and has increased the cost of wholesale and retail funding, which he estimates cost the company £2m after funding grew more expensive last year.
He says: “We have not invested in structured investment vehicles, collateralised debt obligations or any of the other investments that have given rise to substantial losses at other institutions.
“We have kept a traditional business model and still fund most of our lending with retail savings deposits. At 31 December, 95% of the Society’s mortgage book was funded by retail savings, reserves and capital.”
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