According to the study, growth in German e-banking and brokerage will be driven by increasing Internet use, a revamped range of online financial services and an expanding equity culture.

Pension reforms will also have positive effects as the adoption of a new regulatory framework will result in more Germans investing autonomously to complement the government's social security payments.

Mirko Corbetta, research analyst for IDC's European online financial services programme, says online financial services will continue to increase until 2007 due to higher quality new services, healthy Web user growth and an increasing stockholder culture.

"The capacity to deploy an integrated and customer-tuned multichannel system with no overlapping costs will be the successful strategy," he says.

The data comes as German direct bank Entrium, soon to be merged with ING's DiBa unit to create the country's largest standalone Internet bank, reports a rise in net profit to EUR7 million for 2002, up from EUR0.8 million a year earlier. The gains were achieved despite only a marginal increase in customers, up to 975,000 frin 936,000 in 2001. Total customer funds under management (consumer loans, customer deposits and custody account volumes) rose to EUR8.3 million from EUR8 million a year earlier.

Online broker Comdirect is also reporting a major turnaround from a $57 million loss in 2001 to an operating profit of $5.1 million for 2002. The company, which has outlined plans to allocate personal wealth management advisers to customers, recorded a net loss of $10.8 million after deduction of expenses and provisions following an extensive cost-cutting programme.