The Rock Building Society is targeting a higher minimum capital ratio than previously, annual financial statements released yesterday show. The Rock will now target a minimum ratio of 12 per cent, with new policies that require "reporting to the board and APRA" if the ratio falls below this level, according to the annual report.The Rock issued $12 million in new shares during the year. That, along with retained earnings, lifted core capital by one third over the year to $60 million. The capital ratio stood at 13.1 per cent at June 2010, up from 11.2 per cent in 2009.A slight run down in lending also helped lift the capital ratio, with the loan book standing at $940 million at June 2010, down from $1.0 billion a year before.The profile of those loans is also changing. Loans (which are almost all home loans) to borrowers in Victoria accounted for 23 per cent of loans at June 2010, up from 14 per cent in 2009. Loans to customers in The Rock's home state of Queensland fell to 46 per cent from 52 per cent over a year.Credit quality is high with no impaired loans. Arrears of 30 days or more increased to 0.74 per cent from 0.59 per cent over the year.Net profit for the year was $5.1 million, up from $4.3 million in 2009. Of this The Rock earned $3.2 million in the second half.The building society diversified its funding over the second half of the year with a certificate of deposit program, which might cut its prior dependence on funding from the Reserve Bank of Australia that was a feature of the first half result.The accounts also disclose that a regulator - which one The Rock did not say - is making inquiries in relation to "certain customer complaints".The complaint was made only a month ago yet The Rock has already spent $190,000 in relation to this matter, the details of which were not revealed in the financial statements.