ERIC Davey has retired as chairman of the Newcastle Building Society.

He stepped down at the society's annual general meeting held at the Copthorne Hotel in Newcastle on Thursday.

His position will be taken by Chris Hilton, with James Heppell becoming the vice chairman. But Mr Davey, 68, has accepted an offer to serve as the Newcastle's new president.

Mr Hilton, 51, has served on the Newcastle board for 23 years. He is a senior partner at Eversheds and a member of the council of Newcastle University.

Mr Heppell, 63, is chief executive of St Cuthbert Newcastle Estates and has served on the Newcastle board since 1980.

In his closing address at the AGM, Mr Davey said: "Competition in the financial services sector continues to intensify and this is very good news for consumers.

"For ourselves and other financial institutions it presents new challenges and sets even tougher targets. The Newcastle has set about meeting these new demands through the use of technology. We believe we can exploit technology in order to benefit our members through increasing the choice and flexibility we afford them.

"In March we became the first building society in the UK to offer a mortgage approval in principal facility on interactive digital television, through our partners Telewest. We followed this by offering an online savings account via the Internet."

He added: "We have already started a trial of a virtual shopping mall from which customers can purchase a vast array of products and services via Internet terminals in our branches."

Mr Davey also committed the society to continued mutuality in the future.

He said: "The Newcastle wants to retain its status as a strong, independent, mutual society, operating in the interests of our members, our employees and those communities where we have branches."

The Newcastle Building Society is the UK's twelfth largest, with assets of more than £2.4bn and 410,000 members.