Financial services group Bristol & West blamed its investment in internet money site MoneyXtra for a 17per cent fall in half-year pre-tax profits .

The former building society would not say how much it had ploughed into the website, which sells financial products from a range of providers, but said excluding this investment its profits would have been ahead of last year's.

The Bristol-based group is combining MoneyXtra which it bought last December with its recently acquired independent financial advice group Willis National to offer advice over the internet.

It hopes the move will help cut costs, leading to the combined group making a profit, before goodwill, by 2003.

B&W, which is a wholly-owned subsidiary of Bank of Ireland, said its strategy of diversifying into financial advice and specialist mortgage lending was progressing well.

This lending, which includes buy-to-let mortgages and lending to people with bad credit records, accounted for a third of the group's total mortgage business of £2.36 billion during the six months to the end of September.

Savings deposits rose by 12 per cent during the first half, though margins were lower as the group used competitive rates to gain new business.

Overall the group's pre-tax profits for the six months to the end of September fell to £54 million compared with £64.9 million the previous year.

The Bank of Ireland, which also today reported interim results for the same period, saw pre-tax profits increase to 556 million euros (£340.5 million) from 500 million euros (£306.2 million) in 2000, following strong trading in retail banking in the Republic of Ireland.