Overall, total customer loan balances increased 5% to £1.106bn while customer deposits rose to £1.155bn also up 5%, the bank also recorded £40.9m in pre-tax profit, up 44% compared with 2022.

The bank’s asset finance business also experienced record customer drawdowns and net book growth, with exposures up 17% to £83m.

Donald Kerr, CEO at Cambridge & Counties Bank, said: “Across 2023, we continued to execute against our strategic priorities with the aim to become the specialist SME bank of choice in the UK.

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“We recognise the challenging economic conditions and continue to monitor closely the potential impact on our customers, yet our through-the-cycle business model and financial strength enables us to continue to support customers via the deployment of experienced bankers offering deep support where needed.”

Patrick Newberry, chair at Cambridge & Counties Bank, added: “We entered 2023 knowing that it was going to be tough and unpredictable.

“However, by deploying the bank’s strengths — strong customer and broker relationships, good credit risk and arrears management, and nimble deposit gathering mechanisms — we were able to navigate the stormy waters and deliver for our clients.

“Both real estate finance and asset finance delivered a stellar performance as a result of the continuing forensic focus of our front-line teams.”

“While it is true that interest rate movements during the year worked in the wider banking sector’s favour, it is not axiomatic that bank profitability will increase in times of rising rates — action is always needed to capitalise on opportunities.”