Ecology seeing customers shun the traditional banks

The building society, based in Silsden near Bradford, said assets were up 3.06 per cent year-on-year to £106.6m by the end of July.

It posted expectation-busting mortgage lending, with its loan book reaching £75.7m, according to its maiden set of half-year results.

One of the UK’s smallest building societies, it lends to projects often rejected by larger players, such as renovating derelict buildings, fitting energy-saving improvements and eco new-builds.

The Ecology lent £7.26m in mortgages during the six months.

Ecology chief executive Paul Ellis said: “Our continued success shows that sustainability and profitability aren’t opposed to each other – what’s good for the planet is good for business.

“We’re focused on long-term impact, not short-term gain: growth means we can support more people to live sustainably and invest their money in line with their principles.”

The customer-owned lender said it has seen a “surge of interest in ethical alternatives to the big banks”, which have been marred by numerous scandals including insurance mis-selling and LIBOR interest rate-rigging.

Customer savings account openings increased by 33 per cent year-on-year, the lender said.

Savings balances rose by 3.1 per cent to £99.1m.

Net profits were “above expectations” at £194,000. The mutual did not provide comparative figures for the prior 2011 half year.

Mr Ellis said there is more scope for growth as green building projects increase in popularity.

“The UK has the potential for a thriving green economy – not least in meeting the urgent challenge to improve the energy efficiency of our housing stock,” he said.

“A widespread effort to retro-fit our properties could contribute to the recovery our construction sector desperately needs.”

The Ecology this year launched a campaign to encourage homeowners to improve the energy efficiency of their homes, helped by its C-Change Retrofit scheme.

This offers interest rate discounts for improvements in homes’ Energy Performance Certificate rating.

The Ecology was founded in 1981 with just £5,000 in Cross Hills, West Yorkshire.

By 1985, it had more than 1,000 investors and assets of £1.25m, and in 2011 its assets passed £100m.

The mutual also lends to organic smallholdings, straw bale constructions and housing co-operatives and associations.