Virgin Money has more than doubled annual profit in its first set of results since the bank backed by Sir Richard Branson floated on the stock market.

The bank, which bought the “good” part of Northern Rock from the government in 2012, became a public company in November. It is one of several banks seeking to break the big lenders’ dominance after the financial crisis.

In the year to the end of December, underlying pre-tax profit increased to £121.2m from £53.4m the year before. Profit growth was spurred by an 11.8% increase in mortgage balances to £21.9bn, beating wider market growth of 1.4%.

Jayne-Anne Gadhia, Virgin Money’s chief executive, said the bank had outperformed the fiercely competitive mortgage market by establishing links with mortgage advisers and offering customers speedy service. Borrowers increasingly relied on advisers to steer them through tighter lending requirements, she said.

“From an intermediary’s perspective, they have to offer the customer a good deal in terms of price but the quality of service is also important. If we don’t get an offer to their customer within 10 days of receiving all the information we need, we will pay the customer £100.”

Gadhia said she thought the mortgage market would stay active despite signs that house prices were cooling.

“There isn’t sufficient supply in the UK. That keeps the mortgage market buoyant. Despite the gentle volatility we have seen, I think prices will continue to hold up and the mortgage market will continue to be very lively.”

Virgin Money’s market value has increased from £1.25bn at the time of its flotation to £1.42bn and the company is likely to join the FTSE 250 index at the end of March.

Gadhia has run Virgin Money since 2007. Her pay for 2014 more than doubled to £3.64m, including a £1.5m bonus, from £1.45m the year before.

She said scandals affecting the big banks, such as HSBC’s Swiss private bank enabling tax evasion, had helped Virgin Money attract customers but that the stream of bad news was unfortunate for the industry.

“We do get a benefit from the fact we have no legacy [issues] at all. We see the warmth of customer empathy with the Virgin brand and that translates into business but I take no pleasure in that.”

Underlying profit excludes one-off items such as flotation costs and an additional £36m payment to the Treasury for Northern Rock. Statutory pre-tax profit, including those items, fell to £34m from £185m in 2013 when the bank had a £189m gain from selling a credit card business.