The UK's mutual sector is "well placed" to benefit from a recovering economy and rising demand for mortgage loans, according to the accountancy firm KPMG.
In its assessment of the financial health of the UK's building societies, KPMG said that 35 out of 46 saw their assets grow in 2012.
The report added that borrowers should see benefits from this.
But it warned that savers were "unlikely" to see rates improving any time soon.
KPMG said that assets for the sector fell by £2.1 billion in 2012, but that this was in large part due to the plunging assets of Nationwide Building Society, the sector's biggest player.
Nationwide saw £5.4bn wiped from its assets over the financial year, as it faced a funding shortfall.
If Nationwide was excluded from the findings, the UK's building societies would have grown their combined assets by 2.8% to £122.6bn.
Lending on mortgages has grown slightly in the past year.
But Simon Walker, partner in KPMG's Financial Services practice, said that while there was positive news for borrowers, depositors, on whom the sector relies heavily, there is not much cheer.
"Now that banks and building societies have rebuilt their funding, competition for retail funding has fallen and savers' rates with it," he said.
"The impact of the Funding for Lending Scheme has exacerbated this. The likelihood of savings rates improving in the near future is very low," he said.
Source: BBC News - Business http://www.bbc.co.uk/news/business-24194720#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
