Brian Davis, the chief executive, said almost one in ten Nationwide savers now used its online service. "We are getting a lot of demand. We are having to bring our plans as far forward as possible."
Developments to be rolled out in the new year could include online mortgage applications and payment of credit-card bills. Nationwide is also considering e-pricing - passing on the cost savings from Internet banking direct to online customers. But Mr Davis ruled out launching a distinct online brand, like the Co-Operative Bank's smile.co.uk. The Internet should be just another way to reach the public, complementing local branches and phone banking, he said.
Overall, the Nationwide now has 8 per cent of the mortgage market and 7.2 per cent of UK retail savings; larger shares that Mr Davis ascribed to the Nationwide's determination to resist demutualisation. Income from interest rose by 14 per cent to pounds 477.6m for the half year, but income from other sources fell by 30 per cent to pounds 62.5m.
"We are firmly on course to pass on at least a further pounds 300m in benefits to members over the current financial year," said Mr Davis.