Egg Banking plc is a British internet bank, with headquarters in Derby, Dudley and London, England. Formerly called Prudential Banking plc, Egg was established in 1996, and is now the world's largest internet bank in that it is only possible to operate an Egg account over the internet, or via their call centre. Egg specialises in savings, credit cards and loans but also offers mortgage and insurance products.
History
Egg was established as a division of Prudential plc, the UK life assurance company. Prudential Banking was involved in direct selling of savings and mortgage products. In 1998, the division was renamed Egg and relaunched as the UK's first internet bank. The service gained in popularity, and soon the bank had more than 2 million customers. In 2000, Prudential cashed in on its stake and floated 21% of the company on the London Stock Exchange, retaining a 79% stake. In 2003 Prudential announced its intention to sell its remaining stake in Egg to a third party. Despite rumours of interest from the likes of Royal Bank of Scotland and HSBC, no formal offers were made public, and Prudential formally dropped its plans in 2004.
Subsequently, Prudential bought back the remaining minority share in January 2006 and de-listed the organisation from the London Stock Exchange. Chief Executive Officer, Paul Gratton, left the organisation in March 2006 to be replaced by then Chief Operating Officer, Mark Nancarrow. Mark was subsequently replaced by Ian Kerr, formally of HBOS in November 2006.
On 29 January 2007, Prudential announced that it has agreed to sell Egg to Citigroup for a consideration of £575 million subject to approval by the Financial Services Authority.[1][2]
On 1 May 2007 the sale of Egg to Citi was completed and Egg CEO Ian Kerr was appointed head of Egg and Citi UK Consumer. [3]
In November 2007, according to local media, approximately 350 non-specialist roles were to be moved from the Dudley centre to Derby resulting in redundancies and relocation packages. This was scheduled to be confirmed in 2008.
On 2 February 2008, Egg decided to cancel the credit cards of 161,000 (7%) of its customers. The bank has given customers 35 days' notice, after which they will not be able to spend more on their cards.[1] While publicised as an attempt to purge "risky" customers from their books, many affected customers have come forward with claims that they had excellent credit histories. This has led to speculation that the move was an attempt to remove customers who do not accumulate interest on their accounts and therefore do not generate profit for the bank.[2]
La Carte Egg
Capitalising on its British success, Egg launched in France in mid 2002. However, despite investing heavily in the French market, the services were never popular with the French, who generally hold fewer credit cards than the British. In 2004, Egg decided to close its French operations, selling the business to ING of the Netherlands.
References
See also
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