THE past year has been one of innovation and investment at Newcastle Building Society.

That was the message from chairman Chris Hilton at the society's annual meeting in Newcastle, yesterday.

Mr Hilton told members: "We are continuing to provide our customers with a combination of imaginative products coupled with as much financial certainty as we can generate.

"We continue to be innovative. Our Internet account is proving to be highly successful, and in the past year we have launched our online shopping mall and insurance broking service."

He added: "We are introducing Internet terminals to our branches to allow customers to get insurance quotes or buy goods on the Internet."

Investment would continue to be a key factor in the current year, after a £1m investment in a system, which moves work electronically around the branch network .

Mr Hilton said: "One of the ways in which we can maintain a substantial branch network is by allowing the branch staff to handle all sorts of administrative work as an extension of our head office."

The society had no plans to convert to a bank. "Your board believes in our mutual structure," he said. "It gives us an advantage over those organisations that have to account to, and pay dividends to, their shareholders."

Referring to the society's financial performance, Mr Hilton noted that the past year had been "nothing less than sparkling".

He said: "Our assets have increased by ten per cent, our management expenses have come down and our profit has increased by ten per cent to £12.1m.

"Those results have only been achieved as a result of the support of our members and business partners, but fundamentally the credit must go to our hard working, enthusiastic and conscientious staff."

Mr Hilton then added: "Much of what we have achieved wouldn't be possible without the relentless attention to detail of the majority of the staff who work behind the scenes.