Specialist mortgage lender Ecology Building Society, which focuses on advancing funds for green buildings, said its ethical, long-term approach was essential to boosting the UK’s financial sector after growing further in 2012.

Paul Ellis, chief executive of the Steeton-based mutual, has urged the big banks to put ethics back at the heart of their operations following their past mistakes which rocked the UK economy.

Ecology Building Society achieved record profits and mortgage assets in the year to December 31 2012, with net profits increasing by eight per cent to a better than expected £459,000 against £425,000 in 2011. Gross lending of £14.3 million, down on the £18.3 million a year earlier, took the Society's overall mortgage balances beyond £75 million for the first time to £77.34 million.

Savings balances also rose to their highest level, exceeding £100 million for the first time, ending the year at £101.92 million compared with £96.14 million in 2011.

The growth in net profit added to Ecology’s capital base, increasing its financial strength and enabling it to lend more money.

In 2012 Ecology lent more than £14 million for sustainable properties and projects, with 84 per cent of mortgages advanced on residential properties, including new builds, conversions and renovations, and 16 per cent on community developments- including those by charities, housing co-operatives and community businesses.

The society reduced total provisions against possible mortgage losses by 70 per cent, which it said suggested that the worst effects of the financial crisis had been weathered and showing the resilience of the market for sustainable properties. Ecology saw positive savings inflow in every month of the year, during which it maintained its commitment to never pay less than one per cent interest to savers.

All savings and mortgage interest rates have remained unchanged since January 2010.

Mr Ellis said: “Our financial success is based on sticking to our core principles: thinking long-term, putting our members first and focusing on our social and environmental impact. Our priority for 2013 is to continue to expand our mortgage book, so we can support more and more people to build or renovate sustainably.

“The big five banks saw their profits wiped out by the cost of their past mistakes. Isn’t it time they realised that putting ethics at the heart of their work is their only route to a sustainable future?”

The results come less than two weeks after Ecology was named financier of the year and company of the year at the 2013 New Energy and Cleantech Awards for its ‘integrity and commitment to green causes through three decades of sustained growth’.