Four thousand Irish savers have put an average of £30,000 (€38,000) each into direct savings accounts at the British mortgage bank Northern Rock which opened for business here last November. In all, savers have lodged £125 million with the bank which says it is extremely pleased with its performance in the Irish market so far and is on target to secure a market share of more than 1 per cent by year end.

Some 80 per cent of the funds are held in individual savings accounts which Irish customers can access by post, over the telephone or through the Internet. The bank is currently paying an annual rate of interest of 5.25 per cent on these accounts which savers can access without giving notice. The minimum deposit is £1,000 up to a maximum of £2 million. A further 20 per cent was deposited by Irish companies in its business accounts.

The results show Northern Rock has been successful in winning market share from Irish institutions and is increasingly being considered by Irish savers as an attractive home for their savings. The bank, which is based in Newcastle-upon-Tyne, made an aggressive entry into the Irish market last November offering the highest rate of interest on demand deposit accounts and guaranteeing to pay at least 1 per cent above the European Central Bank (ECB) rate until January 1st 2002.

Announcing results for the six months to the end of June yesterday, Northern Rock said it now had 4,000 savings accounts held by Irish depositors with an average balance of £30,000. Irish account-holders are typically aged between 40 and 50. About 50 per cent of the accounts are held by people in the Dublin area with the remainder spread around the Republic. The bank reports that around 20 per cent of applications for savings accounts are made over the Internet and the number of new accounts being opened is running at between 150 and 200 per month.

A spokesman said the bank is "chipping away" at the Irish deposit market and is very pleased with its performance to date. Northern Rock says it has no immediate plans to introduce other types of products such as mortgages into the Irish market but may opt to do so in the future if it believes there is an opportunity for the bank to achieve significant market share.