Japan Net Bank said Thursday it posted a net profit of 1.1 billion yen in the business year that ended March 31, the company's first net profit since it started operating in October 2000.

Japan's first Internet-only bank, which is a unit of Sumitomo Mitsui Banking Corp., logged a 1.7 billion yen net loss the previous year.

The bank's net profit was largely attributed to the rapidly growing market for online businesses, including Internet shopping, auctions and brokerage operations.

"The biggest reason behind the full-year profit is a rise in online settlements," Japan Net Bank President Shuichi Fujimori told a news conference. "Since these settlements grew more than we had expected, we gained profits from the commission."

The number of accounts at the bank topped the 1 million mark in December, making it the first Internet-only bank in Japan to top this mark. Fujimori said the bank aims to have 1.3 million outstanding accounts by the end of the current business year.

Asked about the fierce competition expected with new entrants in the sector, including Yahoo Japan Corp. and Livedoor Co., Fujimori said his bank will focus on convincing users of the quality of its services.

He was also positive about the future of the online business market, which he expected to continue to grow until 2008.