Alliance & Leicester's profits are up 10 per cent over the first half of the year thanks to the a surge in internet customers.

The bank's core operating profit roses from £268m in the first half of 2006 to £295m in the same period this year, £2m pounds ahead of average analyst forecasts.

'We are continuing to see significant growth in the area of internet banking - more and more of our customers are switching to this more efficient channel,' said Andy Muddimer, head of internet banking at Alliance & Leicester.

Forty-one per cent of sales of the banks 'core four' products - loans, current accounts, mortgages and savings - were generated via the internet since January, up from 35 percent a year ago. The jump was fuelled by the rise in internet current accounts, says the bank.