British online bank Egg slices losses

22nd July 2004, Comments 0 comments

LONDON, July 22 (AFP) - British online bank Egg, put up for sale by its majority shareholder Prudential, said on Thursday that the group's pre-tax losses for the first half of the year had been slashed by 82 percent.

LONDON, July 22 (AFP) - British online bank Egg, put up for sale by its majority shareholder Prudential, said on Thursday that the group's pre-tax losses for the first half of the year had been slashed by 82 percent.

Egg posted pre-tax losses of GPB 4.1 million (EUR 6.1 million, USD 7.5 million) in the six months to June 30, compared with losses of GPB 22.8 million during the same period of the previous year.

The online bank last week announced it was to close it loss-making French operations after insurer Prudential put the entire group up for sale in January.

Egg's chief executive Paul Gratton Thursday said he was unable to comment on any potential transaction involving Prudential's 79-percent shareholding, while Royal Bank of Scotland declined to comment on a report that it was mulling a possible 50-50 joint venture investment in the online bank with the insurer.

"We do not comment on speculation," said a spokeswoman for Royal Bank of Scotland in response to a report in London's Independent newspaper.

Prudential, which founded Egg in 1998, has meanwhile said it is still considering proposals for its stake in the online bank.

The price of shares in Egg fell by 3.03 percent to GPB 152.25 in morning deals in London.

Egg recorded pre-tax profits of GPB 1 million pounds in the three months to June 30 compared with losses of GBP 7.1 million during the same period of 2003.

"The past six months have been difficult for Egg with the uncertainty created by the potential sale of the group," Gratton said in a statement accompanying the company's interim results.

"However we are unwavering in our belief in Egg's potential and the assets we have built. We enter the second half of the year with confidence and look forward to further developing our UK business," he added.

Egg's British business achieved an operating profit of GPB 34.5 million in the first half of the year compared with GPB 36.7 million during the same period in 2003.

It meanwhile grew its customer base by 292,000 in the six months to June, giving the online bank a total of almost 3.5 million customers in Britain.

"The UK business has delivered a sound performance in the first half of the year despite increased competition and rising interest rates." the company said.

Egg France's operating losses narrowed to GPB 32.2 million pounds in the six months to June 30 compared with GPB 48.7 million one year earlier.

The online bank last week announced plans to close its loss-making French operations in a bid to attract buyers for the group's British arm.

Egg said Thursday it expected the pre-tax cost of closing Egg France to be approximately GPB 113 million pounds and that the process of withdrawal from the French market would take around 18 months.

Egg entered the French market in November 2002, four years after its launch in Britain.

 

© AFP

 

Subject: French news

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