FAST-GROWING Kent Reliance Building Society, recently hailed for its "frugal" management, is switching its Chatham branch to an agency.

The High Street branch is being transferred to Mortgage Information Limited, a company that already runs the society’s former branches in Gillingham and Rainham, in a cost-saving move.

All eight branch staff transfer to the new employer on existing terms.

Customers would not notice any difference, the society claimed, saying it would "continue to receive the full range of Kent Reliance savings and mortgage services, from the same people in the same offices".

Deputy chief exectuvie Rob Procter said: "The success of this strategy has enabled us to maintain our high street presence, whilst reducing costs. The benefits are passed on to members through highly competitive products."

The transfer of the Chatham branch leaves a question mark over the future of the Society’s only remaining branch at Hempstead Valley Shopping Centre, Gillingham. The cramped branch is upstairs and the society says it has been frustrated in its quest for a larger downstairs outlet.

Mr Procter added: "We have long sought larger premises on the ground floor. We have simply outgrown the current premises and our staff are as frustrated as our customers at trying to meet the ever-increasing demand from the current cramped unit above Sainsbury’s."

The decision to switch to an agency arrangement in Chatham was announced as the mutual won praise from accounting firm KPMG.

KPMG contrasted the performance of the "frugally run" Kent Reliance with many of the other 62 societies "struggling with weak growth, poor cost control and limited if any success in diversification".

The report highlights "the growing gap between the successful societies with strong growth, falling cost ratios and successful diversification".

It concludes that "with the market set to become more difficult, the gap between societies seems set to grow and pressure on the boards of those weaker performers will rise."

Mr Procter said: "This respected study is a resounding endorsement of our innovative strategy to reduce costs by outsourcing work to our Indian subsidiary company, Easiprocess, and the transfer of our branch network to agencies."

Kent Reliance is now the 19th largest building society in the UK, with 25 per cent growth last year. It is the fastest growing building society, with the highest assets and most borrowers per branch.