Newcastle Building Society is the UK's 13th largest

The building society, based in Newcastle- upon-Tyne, is the UK's 13th largest building society and employs about 770 people.

On Wednesday said it had built profits by 4.4% on the back of record lending and new partnership deals.

Pre-tax profits in the half year to June 30 were �9.4m after gross mortgage lending during the period climbed to its highest-ever level at �331m.

Faced with growing competition in its core savings and mortgage markets, the Newcastle has branched into providing mortgages and savings products through partnerships with companies.

'High' quality

Chief executive Robert Hollinshead said regulation and increasing competition showed no signs of abating, but added the new initiatives were helping the society to compete.

Its total mortgage and savings assets under management rose during the period by nearly �500m to about �3.3bn.

The society said the quality of its mortgage portfolio remained very high and that it had only 13 properties in its possession at 30 June.

It also acquired �365m of mortgage assets and �50m of savings balances from Australian financial services group AMP last month.

Core business

As part of its new measures, it provided a guaranteed equity bond savings product for Mirror Group Newspapers to offer to its readers.

It also joined forces with the Manchester Building Society to offer a guaranteed equity bond and also secured a tie-up with the Prudential to offer mortgage related products to Pru customers.

Mr Hollinshead said the society believed the market for its core business was likely to become more competitive.

He said: "That makes it difficult for a group of our size to compete with the bigger players, so we have to be able to do these other things to cross-subsidise the business."