In the first half of last year the society, the sixth largest in the country, made a pre-tax profit of pounds 44.1m after an unusually high bad debt provision of pounds 98.5m.
Much of this related to loans inherited from societies Cheltenham & Gloucester had taken over. Some of these had much higher levels of arrears than C&G.
Andrew Longhurst, chief executive, said this year's first-half result was more typical of C&G's performance.
However, he did not expect the society to top the league table of building society performance due to be published by UBS next week. The society has led the table, which measures profits, expense ratios and a number of other performance factors, for each of the past three years.
C&G recently started its first corporate advertising campaign, raising questions about whether it might be planning to convert itself into a public company. Mr Longhurst denied this was on the agenda.
Three or four years ago he had been concerned about restrictions on building societies' ability to raise wholesale funds, he said. With funding needs lower now, this was no longer a pressing problem.
C&G increased assets by 2.5 per cent to pounds 16.5bn in the first half and gross mortgage lending rose 4.6 per cent to pounds 1.1bn. This reflected the success of fixed-rate loans.