Egg losses soar on France debacle

UK 'satisfactory'

By Tim Richardson • Get more from this author

Posted in Financial News, 19th October 2004 10:05 GMT

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Egg's decision to pull out of the loss-making French market is continuing to hammer the UK internet bank as the group recorded a pre-tax loss of £103m in the nine months to the end of September. Much of this loss is down to the £113m Egg has already announced it is spending to exit France, along with the £35m its French business has lost so far this year.

Instead Egg, 79 per cent owned by The Pruduential, is talking up its UK business, which delivered a "satisfactory set of results in what has proved to be a challenging year for Egg". The UK made a pre-tax profit of £53m for the first nine months of the year, down from the £57m profit notched up last year.

In further retrenchment to its core UK business, Egg today said it had flogged Egg Invest, its funds supermarket, to Fidelity FundsNetwork. The transaction comes with one-off costs of £3m, but should help the company save money in the future.

Said chief exec Paul Gratton: "Our UK business has delivered a satisfactory set of results, with the potential sale process initiated by Prudential in January creating uncertainty in addition to the increased competition and rising interest rates that have impacted the credit card and personal loan markets.

"Looking forward, Egg people are firmly focused on the future development of our core UK business, leveraging our brand and high quality customer base to expand our franchise."

By mid morning shares in Egg were up 0.5p to 90.25p.®