Challenger bank Aldermore Group reported a better than expected increase in full year pre-tax profit following an increase in mortgages and loans to small and medium-sized businesses.
Challenger banks are thriving amid customer dissatisfaction with traditional lenders following a series of banking scandals.
Aldermore said it had not yet seen a "significant" shift in customer behaviour because of Britain's increase in property tax, expected to come into effect in April, for those who buy a house in order to rent it and on second homes.
The bank, founded in 2009 by a former Barclays executive with backing from AnaCap, said pre-tax profit rose 88 per cent to £95m for the year to December 31.
Analysts were expecting the company to earn £91.4m.
Aldermore, which went public last March, said net lending to customers rose 28 per cent to £6.1bn in the year.
Aldermore's shares were trading up 6.4 per cent to 230p this morning, outperforming the FTSE 350 Banks Index.