by business editor Trevor Sturgess

OneSavingsBank, the owner of Kent Reliance, is aiming to be "a real challenger" to bigger banks after making an £8 million profit last year.

It went into the black after turning in an £11 million loss in its previous inaugural year.

Much of the turnaround came from accounting for goodwill from acquisitions but also increased savings and mortgage lending.

Its net interest margin rose from a negative £1.4m the previous year to a positive £15.7m.

This was driven by resumed mortgage lending by Kent Reliance, now a private sector/mutual hybrid after a substantial capital injection by J C Flowers and a majority decision by members.

Lending more than doubled to £300m, with a sharp rise in the second half of the year.

The bank bought two loan companies Interbay, which lends to small and medium enterprises, and Prestige Finance. These acquisitions helped boost total assets to £3 billion, up 28%.

OneSavings Bank added 20,000 new customers in 2012, contributing to a £663m growth in retail savings.

It said this was due to removing headline-grabbing bonuses from accounts and offering good long term rates.

Kent Reliance has also revamped its branch network, opening an outlet in Canterbury and giving a facelift to others.

It reverses the trend of branch retrenchment as a building society. It is seeking a new unit for customers at Hempstead Valley Shopping Centre, Gillingham.

Andy Golding, chief executive of OneSavings Bank, said: “The year has been one of growth, change, people and diversification.

Our ability to focus on supporting growth in lending to small and medium enterprises, deliver value for money to our members and customers whilst turning around the financial position of the Bank significantly faster than planned, shows that our hybrid model based on mutual roots works.

“It is our intention to become a large-scale niche mortgage lender through taking advantage of our capability, the current market opportunities and our enviable access to capital and funding to deliver that growth.

“I am delighted with the 2012 outturn, and with the significant uplift in net interest income, which provides a firm bedrock on which to continue to build a strong and profitable business during 2013.

"I remain very excited about the opportunities ahead of us and the opportunity to create a real challenger to the homogeneous big banks.“