Leeds Building Society posted a record profit before tax for 2017 of £121m as its total mortgage balances reached £15.2bn.
The building society also saw "strong" net mortgage lending of £1.8bn.
Over the course of 2017 it provided a mortgage to more than 50,000 people, including 13,000 first-time buyers.
Peter Hill, chief executive of Leeds, said: "Our successful mortgage strategy and improved underwriting processes have supported sustained lending growth in recent years which, combined with a further reduction in loss charges, helped us achieve a record profit before tax of £120.9m.
"The right level of profit is essential to the success of a mutual and our profit in 2017 enabled us to increase our capital to £988m and maintain strong levels of common equity tier one and leverage ratios, well above the regulatory minimum requirements."
The building society did not disclose its net interest margin - the difference between the interest generated from mortgages to that paid out on deposits - but Mr Hill said it was likely to fall in the coming years.
He said: "Uncertainty around the UK's exit from the European Union remains. We also expect 2017's tough competition, particularly in the mortgage market, to continue and this is likely to put downward pressure on our net interest margin during this year and into 2019.
"However our robust 2017 performance means we are well-placed to withstand economic uncertainty, protect our members' money and keep growing sustainably."
During 2017 Leeds paid an average 1.33 per cent to its savers compared to the rest of the market average of 0.7 per cent.
Savings balances increased by a record £1.9bn and now exceed £13bn.
damian.fantato@ft.com
