Its mortgage balances also rose from £24m to £68m and its overall lending book increased to a record £2.2bn.
The mutual’s profit before tax dropped to £8.6m, compared to £10.5m the year before, owing to investment in its modernisation programme.
Chairman John Hooper (pictured) said: “Our Cumberland 2025 plan will provide new digital channels, making it easier, quicker and more convenient to engage with us and manage accounts.
“Our branch customers will also benefit from a more streamlined, efficient way of working ‘behind the scenes’ too.”
Chief executive Des Moore said he expected a “noticeable reduction in profits over the next few years” as the Cumberland steps up investment and protects its vulnerable customers from the rising cost of living.
As of 31 March 2022, nine mortgage accounts were 12 months or more in arrears. The total amount outstanding on the accounts was £1.65m while the arrears totalled £182,000, representing 0.01 per cent of mortgage balances.
The mutual offers forbearance such as a temporary transfer to interest-only payments or a capitalisation of arrears. As of 31 March 2022, forbearance measures have been agreed for 32 residential mortgages with a total balance of £3.29m. This is down from 233 accounts last year with balances of £37.2m.
Net interest income grew by 11 per cent to £47.7m, partially attributed to a positive mix within its mortgage books.
Its net interest margin rose by eight basis points annually to 1.69 per cent. The mutual said the first part of its financial year saw “strong margin growth” as deals agreed in late 2020 and early 2021 completed. As customer demand outstripped supply due to withdrawals in the market, the Cumberland saw growth particulary in high loan to value (LTV) products.
It also supported more than 500 first-time buyers during the year.
In the second half of the year, its margin was squeezed as other lenders returned to the market and competition increased.
The mutual said its decision not to target high levels of business at low LTVs had moderated the impact on its margin.