Abbey National plans to spend £200m to recruit 1m internet customers for its newly created bank, cahoot, and its own-brand internet bank by the year-end.

Within hours of unveiling cahoot yesterday, Abbey claimed the website was receiving six hits a minute from people wanting to register for the separately branded bank-cum-supermarket before its opening in six weeks' time.

Joining its rivals' race for dot.com credibility, Abbey said cahoot would employ 50 people and might take investment from venture capitalists to help it roll out in Europe. The bank's shares rose 47p to 713p.

Abbey said cahoot - so called because cahoots tend to be formed between friends rather than enemies - would initially offer credit cards and current accounts and would involve links with Blackstart for videos, Boxman for CDs, Thomas Cook for travel and Dell for computers.

As it reported a 17% rise in 1999 pre-tax profits to £1.8bn, Abbey said it would also launch an upmarket bank, which would have a presence on the net and in its branches, later in the year. The business, codenamed Prosper, will target people with more than £50,000 of net assets - a market of more than 4m.

The bank's internet service for existing customers will be begin next month and be accessible on digital television.

Outlining its "multi-channel" approach to customers, Ian Harley, chief executive of Abbey National, said: "We don't believe there's too much room for internet start-ups which don't have a very visible parent."

He played down speculation about Abbey being a takeover target, particularly for Lloyds TSB. He said it was "hard to see" why Lloyds would want such a deal.

Analysts said the profits announced by the bank,were in line with forecasts. Abbey directors said profits outside its core retail bank - where they rose 8% to £996m - were contributing 45% of the overall total and edging towards its 60% target.

It will pay a total dividend of 40.25p. Analysts said the bank had clearly faced a squeeze on mortage market share.

"The bottom line was ahead of expectations but the market share performance was very poor," said Jon Kirk at Fox Pitt Kelton. He said the bank had repriced aggressively in the fourth quarter when its market share was 17%, against 6%for the whole year.