LONDON (Reuters) - npower, the British retail arm of German utility Innogy, lost 155,000 domestic accounts last year amid the highest customer churn in the UK for several years, the firm said in its annual results on Monday.

Npower's revenues for 2017 dropped by 76 million pounds ($106 million) to 6.027 billion pounds due to fierce competition between suppliers, it said in a statement.

It had 4.56 million UK customer accounts at the end of 2017, down from 4.71 million a year earlier.

Adjusted earnings before interest and taxes (EBIT) for 2017 rose by 34 million pounds from a year earlier to 56 million pounds, mainly thanks to a savings programme.

"Energy supply remains an extremely competitive market. Rising costs and the changing regulatory landscape, such as the proposed standard variable tariff price cap, present all energy suppliers with real challenges," npower's Chief Executive Paul Coffey said in a statement.

"While we saw a 155,000 year-on-year decline in domestic customer accounts, these can largely be attributed to the first quarter," he said, adding that the company gained customers during the rest of the year which partially offset first quarter losses.

Britain's energy firms are under pressure to reduce bills. Regulator Ofgem is preparing to issue a price cap on the most widely used tariffs.

Large energy suppliers have been losing market share as smaller rivals have lured customers away with cheaper deals.

Innogy-owned npower and SSE (>> Scottish and Southern Energy) said last year they would merge their retail gas and power operations, combining some 11.5 million customers to better challenge top-ranked British Gas.

However, a surprise breakup of Innogy by RWE and E.ON, announced on Sunday, could complicate the merger, some analysts said.

Coffey said the proposed merger was on track and the company recently started work to start a review process for the Competition and Markets Authority.

(Reporting by Nina Chestney; Editing by Susan Fenton)

Stocks treated in this article : RWE, E.ON, Scottish and Southern Energy, Centrica, innogy SE