The bank says some 260 million transactions were processed through its Internet banking service last year and sales from direct channels represented nearly 40% of total sales in 2003.

Banking product sales through the Web channel continue to grow rapidly with an average of more than 70,000 product sales per month, an increase of 80% on 2002. In addition, the usage of its telephone channel increased by 29% over the year.

Direct sales of insurance products also grew, with over one million new policies sold through direct channels in 2003, an increase of 14% compared to 2002. Sales through the Internet distribution channel almost doubled in 2003.

Reporting back from its foray into the energy markets, the group says customers purchased over 100,000 products from its gas, electricity and home telephone services business, Ideal, which was launched last July.

Income from credit and debit card services increased by £46 million mainly as a result of a growth in interchange income following the acquisition of the Goldfish credit card portfolio from energy outfit Centrica during 2003. LloydsTSB chief Eric Daniels this morning declined to comment on reports of a potential bid for UK Internet bank Egg, which has also profited from its sizeable credit card portfolio.

The group also says it is continuing to explore outsourcing and offshoring opportunities "to further improve central processing efficiencies". Lloyds TSB announced plans in October last year to close its call centre in Newcastle, leading to the loss of 986 UK jobs, and shift work to its new operaional centre in India. The bank also said last month that it was also hiring 150 workers in India in a pilot test of a programme to migrate general insurance work to the country, leading to the loss of jobs from call centres in Bournemouth and Newport.