Almost 250 people have lost their jobs, following the closure of First-e, Enba's internet banking operations in Dublin.

Staff at the company, based in Dublin's Burlington Road, were informed of the decision to close at 6 p.m. yesterday, although rumours of a shutdown had been circulating for some time.

The closure is another blow to the technology sector which has shed more than 2,000 jobs this year and also for internet banking, once heralded as a serious threat to the traditional, high-cost high street-based banks.

First-e provided technologies and support services for Enba's internet banking facilities which are in turn operated by French bank, Banque d'Escompte. Yesterday, German internet broker DAB bank, signed a deal with First-e to buy some of its active customers. DAB bank is Europe's biggest discount broker, in terms of customer assets and is in six European countries, including Britain and Spain.

First-e chief executive Dr Gerhard Huber, in a statement said it was a source of "great regret" that "redundancies had been created" as a result of the announcement.

A spokesman for Enba said staff would get one months pay and statutory redundancy. He said the company would meet all its financial obligations to creditors.

Enba's internet banking operations have been in difficulty for some time and it has been scaling back staff since its failed merger with Spanish internet bank Uno-e. The merger, valued at more than €2.66 billion (£2 billion), was first signalled in March 2000. However, last April it was shelved, with the companies blaming failure to get regulatory approval from the Spanish authorities and a change of heart in the financial markets.

The news raised doubts about the viability of First-e. It had received a €100 million line of Credit from Uno-e's parent bank as part of the proposed tie-up.

The value of internet banks has been falling dramatically because analysts have queried the standalone internet operations model. Obtaining customers is a very expensive business.

DAB's own cost per new client in the first half of 2001 was €339 per client. DAB has 501,000 customers.

It said it had agreed to pay a "variable rate schedule" per First-e client to Enba. The overall amount is thought to be a matter of a few million pounds.

DAB chief executive Mr Mattias Kroener said his bank hoped to convince up to 16,000 clients from First-e's base of 80,000 active clients to switch to his company. "If we get 10-20 per cent of that 80,000 we will be happy," he said.

The 80,000 customers figure is considerably lower than the 200,000 one which were previously cited by Enba. A spokesman said it appeared that not all of those accounts had been active.

First-e did not trade in Ireland, only in Britain and Germany. Never profitable, it offered only a limited portfolio of products.

Ironically, Dr Huber used to work for DAB, formerly called Direkt Anlage Bank and was one of its founders in the early 1990s. DAB is a unit of the HVB Group, formerly called HypoVereinsbank.

Around 35 people will continue to work in factor-e which is the financial technologies development subsidiary of First -e. The latter holds intellectual property rights for a range of financial services solutions. It will continue to operate in Dublin.

Last night the 245 First-e staff who are now redundant set up a website offering themselves for hire. The address is: www.fir-tree.com.

In his statement, Dr Huber said he recommended the staff to other potential employers "as the highest calibre, most experienced professionals available within the information technology and financial services sector".