National Irish Bank (NIB) made a pretax loss of €4.3 million in the first nine months of this year, according to figures released yesterday, but said its lending volumes were growing at twice the market average.

Over the period, NIB invested in new technology, training and the introduction of new services and products, including a low-margin mortgage, which it launched last month. In April, the bank moved all of its operations to the technology platform of Danske Bank, the Danish company that took over NIB and Northern Bank in 2005.

Over the same period in 2005, the bank made a pretax loss of €2.7 million.

NIB made a profit of €13 million in the third quarter of 2006, a return to profit that the bank said had taken place earlier than expected.

The overall loan book at the bank stood at €6.3 billion at the end of September, an increase of 54 per cent year-on-year.

NIB said it had received more than 10,000 enquiries from customers about its new mortgage product in just over a week, which it said proved that mortgage holders had a huge interest in switching providers in order to secure a cheaper interest rate.

NIB chief executive Andrew Healy said the bank was pleased that its performance had accelerated, but he admitted that the bank still has "a long way to go" in its aim to eat into the market share of the big banks.

However, sales of personal banking packages are exceeding expectations, with more than a 1,000 new accounts opened a month, the bank said, while almost all of its Special Savings Incentive Account customers have so far kept their maturing funds invested at the bank.

Customer deposits amounted to €2.6 billion and increased at a rate of 24 per cent year-on-year.

Business lending is growing at a rate of 55 per cent year-on-year and the bank said it was well placed to increase its market share in the sector. As part of its €20 million investment programme, NIB is to open 15 new branches over the next three years. The first new branch will open in Cork early next year.

Meanwhile, First Active has announced that it is introducing an offset mortgage, or a loan where money in a current account and up to three savings accounts can be used to reduce the outstanding mortgage balance and therefore the sum of daily interest charged on the loan.

Although First Active already sold a simpler version of this product - known as a current account mortgage - NIB were previously the only Irish lender offering an offset mortgage.