Bank of Ireland yesterday presented Fsharp, describing it as the first offshore Internet banking service. The online bank, based in the Isle of Man, will target English-speaking expatriates and hopes to be in profit by 2002.

At a press briefing in Bank of Ireland's Douglas branch, executives said Fsharp would run separately to the parent company, with 45 online and telephone support staff. They would not say how much Bank of Ireland had invested in the project, or the size of its budget. They also denied that the operation was designed to facilitate individuals seeking to avoid paying tax in their countries of residence. "Our ambition is to create something really different for offshore customers," said Mr Tony O'Shea, Bank of Ireland's head of offshore banking. "We are currently running the service through a series of rigorous tests to ensure that everything is 100 per cent right for when our doors open for business on September 4th."

He said the bank's aim was to have 10,000 customers signed up by the end of one year, and 50,000 after three years. Unlike many Internet projects, Mr O'Shea added, the venture was focused on generating profits.

"We've done all the figures and they look wonderful, but God knows how they will turn out in reality," he said. "But we do need to see it commercially viable, in my view, within three to five years."

Ms Clodagh Hughes, head of marketing for Bank of Ireland offshore banking, said Fsharp represented the first time a stand-alone Internet bank had operated on a global basis.

"We chose the Internet as the primary channel for Fsharp because it has no boundaries, it is fast, and can be used 24 hours a day, seven days a week," she said.

There were 10 million expatriates, Fsharp said, and the bank's target market was narrowed to the 1.7 million of these who spoke English and had more than £15,000 to invest.

The offshore investment funds will be provided by Mercury Asset Management, while KPMG will offer independent tax advice, Standard Chartered a debit card facility and Bank of Ireland a credit card. Future initiatives could include offering the services in other languages, providing mortgages, or share-dealing online.

The venture is to be marketed using an online and offline advertising campaign beginning in September. Ms Hughes said this would include a programme of national, trade and international press advertising.

Mr O'Shea said Fsharp would have a strict rule about the whereabouts of its customers, and would under no circumstances open accounts for residents of Ireland or Britain. Proof will be required from new customers, he said.

If an expatriate returned home, the account would be closed, he added. This rule was a business choice by the bank, he said, not a stipulation of the regulators either in the Isle of Man or in Ireland.

He denied that the main function of locating the Internet bank in the Isle of Man rather than in Dublin was to facilitate people who wanted to avoid paying tax, but admitted that keeping investments "away from the eyes of the authorities and the taxman" could be attractive to some customers.