OneSavings Bank, the lender behind the Kent Reliance brand, increased its underlying pre-tax profits by 52% to £105.9 million last year as the buy-to-let market continued to perform strongly.

Its loan book grew by 31% to £5.1 billion, driven mainly by a growth of more than £1 billion in lending to landlords and small and medium sized businesses, which increased 51% to £3.1 billion.

Shares in the FTSE 250-listed company, based in Chatham, increased by about 15% following the announcement.

Investors welcomed a 6.7p per share final dividend, bringing its total payout for the year to 8.7p.

The challenger bank said increases to stamp duty land tax for buy-to-let and second homes, confirmed in the budget, had not impacted applications or completions.

However, chief executive Andy Golding acknowledged “the political and regulatory headwinds” the company faces regarding buy-to-let this year.

He said: “We have continued to grow the loan book through our specialist lending brands and improved both our net interest margin and cost to income ratio.

“Looking forward we remain cognisant of the political and regulatory headwinds in buy-to-let and in 2016 we have amended our lending criteria to cement our focus on the professional landlords that we believe will continue to develop their buy-to-let portfolios.

“This is in line with our expectation that the private rented sector will continue to be a vital component of the UK housing market.

“We have entered 2016 with our strongest ever pipeline, and application and completion volumes are showing sustained growth. We look forward with confidence.”

OneSavings Bank began trading as a bank in 2011 when it took over the trade and assets of the troubled Kent Reliance Building Society after the financial crisis.

It floated on the London Stock Exchange in 2014.