IRISH BANKS in Northern Ireland are continuing to receive transfers of funds and inquiries from British bank account holders.

Industry sources say customers of British banks are taking advantage of the opportunity to move funds into Irish-owned banks which they believe offer a better level of protection for their money.

Two of the biggest players in the Northern Ireland market - First Trust, owned by AIB, and Bank of Ireland which also operates the UK Post Office scheme - have declined to comment on the amounts which have been transferred in the last seven days.

But it has also emerged that the largest locally-owned building society in the North is bucking this trend by continuing to attract new account holders - from Northern Ireland and further afield.

The Progressive Building Society has confirmed that new accounts have been opened and funds are continuing to be transferred.

It is understood that among the reasons for this is the society's low exposure to international markets. Its prudent approach to mortgage lending is also one of the reasons why it now appeals to customers.

The society, which held total assets at the end of 2007 of £1.495 billion (€1.93 billion), has enjoyed strong business growth in the last few months in contrast to the general downturn in the financial services sector in the North. It is believed there has been strong demand for new savings accounts, within Northern Ireland and other parts of the UK.

It is not necessary to be a resident of the UK to hold an account in Progressive. The society accepts customers from the Republic of Ireland on a face-to-face basis.

Last year the Progressive, which has seen its total assets grow by 47 per cent in the last five years, saw gross receipts from savings accounts rise by 10 per cent to £357 million.

It is estimated that if current trends continue Progressive could be on target to see net savings rise by 30 per cent on last year's figures.

The society declined to comment on the number of new accounts which have been opened or transferred over the last three months. But Sidney Towe, operations director with the society confirmed that business has been better than expected.

"Savings inflows, to date, in 2008 have been stronger than we had forecast and are up on last year," he said.

"The market turbulence, particularly in recent weeks, has prompted some savers to "smooth" their balances as they seek protection under the Financial Services Compensation Scheme and we have been significant net gainers.

"Not only are we attracting new funds from Northern Ireland but we are also enjoying a steady inflow from savers in Great Britain," he said.