The society is now in a secure funding position going forward following effective cost control and negligible write-downs on its treasury investments.
Pre-tax profits for the group have however taken a hit as a result of the ongoing market turbulence, falling to £115.2 million - a marked contrast to the £130.4 million profits seen the previous year.
Group chief executive Neville Richardson said that strong balance sheet lending had supported its 'robust' performance.
He said: "Our business model is solid and sustainable and our commitment to fairness will continue to serve our members well.”
Total mortgage lending for the year was £8.4 billion with an average loan to value of 63 per cent, with net lending holding firm at £2.4 billion.
Application volumes grew by 12 per cent, with retention rates of more than 75 per cent for customers coming off discounted or fixed rate products.
Arrears were also low, with 1.24 per cent of the Group's accounts three months in arrears - equating to 2,919 of around 250,000 Group mortgages. This compares with 0.94 per cent seen in 2006 when borrowers' finances were much less squeezed.
In addition, only six of the properties in the Group's commercial loan book which comprises commercial property, registered social landlords and residential investments, were in arrears.
Richardson, said 2008 was a year of consolidation for the Group after the stark contrast of the previous year.
"Unwilling to take on board higher risk without the appropriate levels of reward, we reviewed our position in these market areas, choosing to focus on the type of lending that has served us and our customers well for more than 150 years.
“Britannia is strongly-placed to take opportunities that present themselves during the current downturn and the subsequent market recovery, when it occurs.”
