The society also saw solid growth in new mortgage advances, up to £974 million compared to £809 million in 2006, and pre-tax profits of £24.3 million, an increase of 20.3 per cent.
Total income grew by 10.3 per cent in 2007 to £83.5 million - more than matching the growth of costs at 4.7 per cent.
In a statement, N&P said the results demonstrated 'strong profits, comfortable liquidity, very low credit losses and ample capital strength,' all of which will stand it in good stead for 2008.
Matthew Bullock, chief executive of N&P said: “In part our success in 2007 was due to our using our Basel ll lending approach to target our mortgage lending precisely to avoid problems and poor returns.
"As the first UK firm to get the go ahead from the Financial Services Authority (FSA) to use this more advanced approach, we were able to take good advantage both in the very competitive first half of the year, and then in the more turbulent ‘credit crunch’ period that followed."
The Society's customer base also grew by 5.8 per cent, with Bullock putting it down to the simple fact that "expert, friendly and well-trained staff means happy customers."
He added that a long-term view was key going forward, predicting a year fraught with challenges. Although he believes these will be a little less pronounced due to the fact that the society now leans less heavily on its mortgage arm due to recent diversification.
He concluded: “2007 will be remembered for turning into an exceptionally turbulent year in financial markets. Despite this it was our strongest performance yet, following a vintage year in 2006, which we then believed marked a high point."
