The move comes at a time when widespread defaults on similar loans in the US have precipitated a global credit crisis which has pushed Northern Rock to the brink of failure and caused other lenders to scale back.

While the Post Office mortgages don't scrape the bottom of the customer barrel the way infamous American "ninja" (no income, no job or assets) or "liar" loans have, applicants will nonetheless be able to borrow up to �500,000 without objective proof of income. Instead borrowers have to show proof of employment, pass a credit check and attend what the bank calls "pre-completion counselling" before getting approval.

The home loans, backed by Bank of Ireland's British lending arm Bristol & West, are aimed at selfemployed and contract workers who have difficulty getting credit from more mainstream sources, rather than at the borrowers with shoddy credit histories who make up the bulk of problematic US subprime customers.

Bank of Ireland has offered selfcert B&W mortgages through brokers since March 1999, but the Post Office venture gives the bank access to a much wider customer base. B&W has a �16bn mortgage book with 250,000 mortgage accounts, while the Post Office, which claims to be the fastest growing financial services provider in the UK, has more than a million customers.

Bank of Ireland has no plans to introduce a similar product in Ireland, where it comfortably leads the home loan market. It has less than 3% market share in the UK and has made a play in the specialist end of the market there as a way of chase higher margin, according to David Odlum, a banking analyst at NCB.

AIB has pursued a similar strategy with its stake in M&T Bank in the US. The Buffalo, New York-based institution was one of the first banks to run into subprime trouble when it booked a $7m net income loss in the first quarter of this year on a $12m write-down of so-called Alt-A loans . . . self-cert mortgages for borrowers with strong credit backgrounds. The read-through on AIB's profits was negligible, as the Irish bank has only a minority stake in M&T.