AIRDRIE Savings Bank (ASB) has seen lending increase by 35% to a record £48.5 million as it continues to attract customers from larger institutions.

Deposits went up 5.4% from £130.6m to £137.6m with reserves going from £15.04m to £15.29m.

Net income grew from almost £5m to £5.263m in the year to October 31, 2011, although pre-tax profits were down from £326,000 to £272,000.

Jim Lindsay, chief executive, said: "It has been another strong year despite the current economic climate.

"We remain optimistic about the future as the strength of the balance sheet is allowing us to continue growing."

Although it only has eight branches, ASB appears to be outperforming the market with Bank of England statistics showing lending to consumers had grown just 0.9% in the 12 months to November last year.

ASB was backed with loans and deposits worth around £10m by business leaders such as Sir Brian Souter, Ewan Brown, Alastair Salvesen, Sir Tom Farmer and Ann Gloag in August 2010 as it announced a strategic growth plan.

Due to opportunities it sees in the market the bank intends to "prudently" grow its mortgage book in the coming months.

Mr Lindsay said: "We are looking at mortgages across the whole market. We believe we can grow there but it is basic banking to consider whether a customer can pay a loan back so we won't be offering high ratios and loan to values that people cannot afford.

"We have to be cautious as we don't want to start getting bad debt on to the balance sheet."

Bob Boyle, president for the past two years, added: "The budgets for the coming year and projections for ensuing years are based on a continuation of a low interest rate environment.

"The principal risk facing the bank remains the potential impact of increasing bad debts.

"The bank has no intention of abandoning its long-term prudent approach to lending."

Provision for bad debts fell from £620,000 to £576,000 with amounts set aside to deal with claims for miss-selling of payment protection insurance up from £8608 to £11,166.

The bank opened its first branch outside North Lanarkshire in Falkirk during September last year and further sites are being considered.

The other branches are in Airdrie, Coatbridge, Motherwell, Shotts, Bellshill, Muirhead and Baillieston.

The bank is launching a new apprenticeship scheme with four people being taken on.

ASB has around 65,000 account holders and employs 103 staff.