NEWCASTLE Building Society's investment in the Internet is continuing to pay dividends.

Such is the success of its Internet banking arm, which currently accounts for £200m of business, that the society is considering launching a euro account on the Internet.

Robert Hollinshead, chief executive of the society, said: "We are aiming the euro account at Finnish residents, as Finland is well ahead in terms of e-commerce and the use of Internet banking. Plus, there is very little competition for such a product in Finland."

Mr Hollinshead was speaking as the society, the 13th largest in the UK, revealed a rise in profits after tax to £11.3m, for the year to December 31, a 9.8 per cent increase on the same period of 1999.

The society's total assets increased by 12.2 per cent, from £2.15bn to £2.41bn.

The new euro account will be part of the Newcastle's European expansion which will include the opening of a branch in Spain, to go with its operations in Gibraltar. As well as the euro account, the Newcastle will be launching a range of online products and services which will keep it at the technological forefront of the financial services industry.

An example of this will be the virtual shopping mall, from which customers can purchase products at prices lower than those available on the high street.

Mr Hollinshead said: "It will be like a virtual Argos catalogue. We plan to have a range of about 30,000 products, ranging from refrigerators and other household goods to DIY products, available on the Internet."

He said: "However, in recognition that not everyone has access to the required technology, Internet terminals will be placed in branches during the course of 2001, allowing branch customers to access the wider range of products and services in an environment that is familiar to them.

"There are already Internet terminals planned for branches in Newcastle, Sunderland, Cramlington and Whitley Bay."

The society has 53 branches in the UK, covering an area from Scotland to Peterborough.

Commenting on the results, Mr Hollinshead said: "These results show another outstanding year for the Newcastle Building Society. We are committed to remaining mutual and our performance of the last year provides a clear indication that our strategy is working."

Looking ahead, he said: "The Newcastle is well-placed to meet the challenges of a rapidly changing and increasingly competitive financial services industry.

"Technology is transforming the way business is transacted and the expectations that customers have of financial institutions.

"The society is at the forefront of new developments and will continue to utilise technology wherever it is appropriate and beneficial to do so, while recognising the value of the branch network to a great many of its members.