Building society-turned-bank Northern Rock has announced it is to hand �2m of its profits to good causes.

The Newcastle-based company set up the Northern Rock Foundation in October when it converted to a bank, with the aim of handing back 5% of its annual earnings to charity.

Initial beneficiaries will be charities working with the disabled and carers.

Northern Rock shares have climbed sharply since it floated at 470p, when members who sold their stakes immediately netted �2,350, and have been trading at more than 590p this week.

Filing it's debut pre-tax profits as a Stock Exchange-listed company, Northern rock declared �148.5m, after allowing for �47m of one-off costs, in 1997.

The pre-tax profits before exceptionals of �197.7m show an 18% rise on the previous year.

The exceptional charges included the �22m costs of converting from a mutually-owned building society to a bank, restructuring costs of �13.2m and a writedown in the value of land and buildings of �11.6m.

The bank said the funds available to the foundation, had it been operating for a full year and without the burden of the one-off costs, would have been �9.4m.

Shareholders will get a final dividend of 7p per share, equivalent to two thirds of a full year's dividend payout.