Independent life is a winner for Airdrie

Scotland's last independently-owned bank reported lending of more than 36 million last year, up 24 per cent on 2009 and compared to about 25.3m in 2008.

It also announced pre-tax profits of 326,000, a 21 per cent increase from the previous year, and said it expects further growth in 2011. Customer deposits increased by 5.4 per cent to 130.6m and reserves rose slightly to 15m.

However, it wrote off 101,000 in bad loans in 2010, almost double the 2009 level, and said the potential for a further rise in bad debts was the main risk facing the bank in 2011.

Airdrie was boosted by a 10m cash injection last August from a group of high-profile investors including Stagecoach chief executive Brian Souter, Sir Tom Farmer and Sir David Murray. The group said the funding was aimed at supporting its capital base and encouraging lending to Scottish businesses.

The capital will also be used by the bank to expand beyond Lanarkshire for the first time, although it recently launched an online banking service.

Two branches will be opening outside Lanarkshire in the next 18 months and further growth is expected over the next five years. Details of the new openings could be revealed next month.

Jim Lindsay, chief executive of Airdrie Savings Bank, said: "Given the uncertain economic conditions, we are very pleased with the results we are reporting today. We have fulfilled our commitment to continue lending to customers and expect that figure to continue growing in the coming months."

He said the response from customers over the past year suggested the time was right to look at expansion.

"There is a genuine appetite in Scotland for an independent bank offering a traditional, reliable banking service," said Lindsay.

Airdrie, established in 1835, is Scotland's last bank not owned by shareholders or other financial institutions and offers savings and current accounts, overdrafts, personal loans, mortgages and money market-based investment products. For most of its history it served only individual customers but in recent years the service has increasingly widened to cover small and medium sized business.

Souter said it was "one of the few remaining financial institutions that people feel they can trust".

He added: "Its customers rely on the bank to look after their money and provide genuine advice without aggressively selling them products or taking unnecessary risks. The growing level of interest in the bank is testament to that, and demand is such that the bank is about to embark on the biggest period of expansion in its 175 year history."