The owner of Kent Reliance grew its underlying pre-tax profits by 29% to £137 million last year.

In its preliminary annual results, OneSavings Bank said its loan book grew by 16% to £5.9 billion, a figure expected to rise by the same level this year.

The Chatham-based lender, which specialises in the buy-to-let market, reported a 55% growth in overall pre-tax profits to £163.1 million.

This was helped by the sale of its Rochester Financing No.1 plc, a group of mortgage loans it sold to Morgan Stanley in May for a net pre-tax gain of £34.7 millon.

Chief exective Andy Golding said the challenger bank had “once again met or exceeded” all of the financial objectives it set when it floated on the London Stock Exchange in 2014.

He said: “This was another period of strong loan book growth through our specialist lending brands, demonstrating the strength of our organic lending franchise with a 28% increase in new originations in 2016, whilst also improving our net interest margin.

“Following this strong performance in 2016, we entered 2017 with a strong pipeline of new business and are seeing very strong application levels in our core businesses.

“OneSavings Bank is well placed to take advantage of opportunities in our core businesses in 2017 and we remain confident in our ability to generate attractive returns for our shareholders.”

The company proposed a final dividend of 7.6p, taking the full-year pay for shareholders to 10.5p per share.

OneSavings Bank was formed in 2011 out of the trade and assets of the troubled Kent Reliance Building Society.

It had been brought back from the brink of financial ruin from bad mortgage lending when it was rescued by private equity investors in 2010.