Danske Bank has said it will encourage customers of National Irish Bank (NIB) and Northern Bank, the two banks it bought for €1.4 billion last year, to avail of its internet offering by making its online banking service cheaper to use than alternative banking channels.

The bank said yesterday that it had no intention of increasing its product prices but would be trying to grow the number of customers who avail of its internet offering by passing on to them the savings it realises when they bank online.

"Our strategy is to encourage customers to service themselves. Our pricing will reflect this," said Carsten Hoegh, Danske's deputy head of international business development.

Danske gave no further details on planned product launches at NIB and Northern over the coming months, however.

Instead, the Danish bank is concentrating on moving the banking systems of NIB and Northern to its own information technology platform, a transition that is expected to take place over the Easter weekend.

At present, National Australia Group, which sold the two banks to Danske last year, is still providing IT and call centre support for both operations from the UK. But from April 17th, the two banks will use Danske technology and a new call centre in Belfast. Danske currently has 800 employees working on the transition which will result in certain changes for customers.

From Easter, customers will access new online facilities and will receive new statements while some functions, such as the bank's internet service, will be closed for some time. NIB and Northern will be writing to clients outlining the changes from next month.

The bank believes the introduction of its advanced computer systems will lead to greater efficiency and productivity, which should help to drive down the cost-income ratios at the Irish banks, making them more profitable.

NIB currently has a cost-income ratio of close to 80 per cent while that of Northern Bank is more than 60 per cent compared to the 51 to 52 per cent enjoyed by the parent group.

Danske's technology will also result in significant changes throughout the Irish branch network as back office functions are removed and centralised. NIB currently has 59 branches in the Republic.

It is currently reviewing areas for branch expansion, with a focus on the southern part of the Republic where it has just 13 branches.