The Yorkshire Building Society today posted record lending of £2.8 billion in its annual results - and revealed plans to create 100 new jobs at its Bradford head office.

The UK's third largest building society, which employs 1,100 staff in the city, saw savings balances grow by more than £400 million with 80,000 new savers.

Pre-tax profits were also up by 13 per cent to £71.6 million and the interest margin was just 0.99 per cent - the lowest gap between rates charged to borrowers and paid to savers of any major lender.

Assets increased by 6.8 per cent to £14.44 billion and the borrower retention rate was 20 per cent higher than the industry average.

Chief executive Iain Cornish said the strong results showed the benefits of investing in the branch network and high quality customer service. He underlined the firm's commitment not to move call centre jobs from Bradford overseas and forecast a host of new jobs.

"We are totally committed to the city and these new posts will involve everything from call centre staff to computer analysts and lawyers," he said.

"There has been a lot of comment about moving call centres to India and such countries. But we are not going to go about doing that because we believe we get much better value and service from our people based here. The workforce in Bradford is both of a good quality and committed."

And he was pleased with society's performance in the tough economic climate.

"There has been a lot of competition, but we think that we have been very well placed to cope with that," said Mr Cornish, who took over from David Anderson last year. "We offer competitive rates and excellent service - a large part of which is delivered from Bradford - and that's what people want.

"It has been tough but to some extent the strongest people can compete most effectively in those conditions."

Mr Cornish said mortgage deals in branches had increased by a third and profits from 2003 would be partly used to expand the 131-strong network.

"Although people want to use the internet and the telephone, these types of financial decisions are important things in people's lives," he said. "They want to talk face-to-face to highly qualified staff who are not motivated by sales targets."

He said the Yorkshire would be launching a marketing campaign during 2004.

Today's figures also showed that the Yorkshire's new subsidiary, Accord Mortgages, based in Bradford city centre, had exceeded its first year lending target despite "intense competition".

Mr Cornish warned that house price rises could not be maintained but said the Yorkshire was well placed to cope with the changing climate.

"We expect the housing market to be less buoyant in 2004," he said. "Competition will be intense and the emphasis on consumer fairness will grow. As a mutual, customers come first. We have a low cost base and our lending has always been prudent. We are therefore well placed for all these pressures."