The Bath Building Society has announced that profit on ordinary activities before tax was £4.2m, up from £3.4m.

The mortgage book has increased to a record high of £242.5m (2016: 231.2m) with gross mortgage lending at £47.6m.

The Society’s assets rose by 4.4% to £311.7, from £298.9m on the previous year and it showed an 11.9% increase in its reserves from £29.9m to £33m year on year.

Dick Jenkins, the Bath’s chief executive, said: “The Society’s record overall profit results contain some one-off items, such as the sale of our subsidiary letting business, from which the Society has benefited. Looking under the surface at the core business, we have had another excellent year in which, despite huge competition and a rather lacklustre housing market, we have once again grown our mortgage book and successfully targeted groups of customers that are poorly served by the big banks.

“Over the years, this Building Society has, quite rightly, won acclaim for being innovative and being prepared to be flexible in the way that we lend to and service our customers. As I bring my career at bath Building Society to a close, I am proud to leave behind a business that is in good shape, in good hands and at the top of its game.

“It has been a pleasure and a privilege to steer this organisation through the troubled waters of the financial crisis to a place where it has a distinctive place and a promising future in an increasingly challenging financial services marketplace.”