KENT Reliance Building Society’s assets have topped £2 billion for the first time.

The Chatham-based mutual with extensive operations in India saw assets leap 32 per cent in the past year.

Pre-tax profits stood at £5.72 million, slightly down on 2006 (£5.95m).

The society admitted that trading conditions had been difficult but emphasised that its mortgages were fully funded by deposits and not subject to the difficulties faced by banks from the credit crunch.

New mortgage lending was £526m, an increase of 25 per cent. The society said arrears were among the lowest in the country, with loss provisions reduced for the fourth year in a row to a "negligible" level. Expenses were 44p for every £100 of assets.

Members’ balances rose by 58 per cent to £1.65bn, with investments from members and depositors up to £786m.

The society said: "At the same time that Kent Reliance has improved efficiency and reduced relative costs, margin has reduced. This is good news for members as the Society gives more back to members than most of the industry as profit has remained consistaent with last year despite the margin reduction."

The society reported good performanceS by its Easiprocess subsidiary in Bangalore, and its Jersey and Guernsey mortgage subsidiaries.

Mike Lazenby, the chief executive, said: "We had a great year - and although profit is marginally down in view of the very competitive market, the increased compliance costs and the lower margins - meaning that we took less from members - we still did very well and this sets a benchmark for others to follow."

He added: "Our liquidity is very good and much better than many in the industry."