Irish-based Internet holding bank, Enba, is in discussions with Irish Life & Permanent and Eircom to introduce an online banking service in the Republic early next year. The new service will operate as a separately branded entity from the three participating partners.

It is envisaged Enba will provide the basic technology for the service here. Irish Life & Permanent, the Republic's largest mortgage and life insurance provider, will provide the financial services platform, and it is understood Eircom, through its mobile and fixed services, will provide the customer base.

If agreement is reached, it will be next year at the earliest before an online banking offering is in place. Eircom is believed to be keen to offer the service as part of its long awaited high-speed DSL (digital subscriber loop) service, scheduled for commercial launch later this year.

A spokesman for Irish Life & Permanent said talks between the parties were at a "preliminary stage" and it was "too early" to speculate on when a final decision to proceed would be taken.

Talks between the parties are understood to have entered their sixth week, and the business plan is still being formulated. Ownership of the online banking service is expected to be divided evenly between the three partners.

Operating as a stand-alone Internet bank, the joint venture would initially offer consumers an online deposit service, at competitive rates of interest. It would be loosely based on Enba's First-E deposit banking product and gradually expanded to offer savings, insurance, mortgage and a range of other financial services.

In Dublin yesterday, Enba founder and chief executive, Mr Gerhard Huber spoke about progress at Unofirst Group, the Internet-based financial services group formed out of a merger between Enba's First-e and BBVA (Banco Bilbao Vizcaya Argentaria) last March. Enba and Unofirst now employ 631 people in Ireland including 250 contract staff.

Mr Huber, who is also chief executive officer of Unofirst, said it is signing up between 500 and 700 new clients daily, and it is on target to begin offering services in France, Italy and Spain early next year. These will be followed by a rollout of the service in Brazil and Singapore.

Unofirst is working off a "financial supermarket" concept which will find customers the best possible financial services deal available online. It currently has 33,500 funded accounts, and €370 million under management. Mr Huber expects Unofirst's customer base will grow from 105,000 today to 300,000 by the end of next year.

Unofirst is developing as an Internet financial services distribution channel which will offer its own business to consumer products, while also providing the technology and infrastructure for other banks and non-banks to offer customers financial services.

Mr Huber says Unofirst Group may seek a stock market listing next year depending on growth at the company. "I don't believe in concept IPOs, we will float when the company is ready."