Swindon-based Nationwide, Britain's biggest building society, shrugged off declines in the savings and mortgage markets to post strong financial results.
Pre-tax profits went down by 7% to £317m which Nationwide blamed largely on accounting changes. A 30% rise in underlying profits to £276m and a fall in bad loans by 35% to £359m were described by chief executive Graham Beale as an "excellent" performance given the tougher economic environment.
"We have achieved significant growth in our franchise against a backdrop of smaller mortgage and savings markets and an abnormally low interest rate environment," said Mr Beale.
"This has been another strong year for Nationwide, during which we have recorded excellent financial results, further improved the strength of our balance sheet," he said.
The previous year's outflows of £8.2bn were reversed to achieve a total net inflow of £600m. More than 350,000 new current accounts were opened, which helped retail deposits climb to £1.6bn.
Gross lending was £12.8bn, representing a market share of 9.5%.
The society's Tier 1 ratio, a key measure of financial strength against future financial problems, rose to 12.5% from 12.2%.
Nationwide has set aside £16m for compensation to customers who took out controversial payment protection products.
Mr Beale said this compared very favourably with the "several billions" announced by the banks recently.
