Smile, the internet arm of Co-operative Bank has shown how successful online banking can be by attracting 120,000 customers in its first six months.
The parent company has reported a 20 per cent rise in pre-tax profits to £88.6m in the year to January 8.
Smile's main competitor in the online banking sector is Egg, owned by Prudential. That venture has done substantially better, drawing in nearly £1m in savings accounts over its first year in business. Half of Egg customers are believed to use the telephone, however.
Co-operative chief executive Mervyn Pedelty says “We bore all the costs of setting up and marketing Smile and still made that profit.”