| Prudential says will hold on to Egg |
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LONDON - Leading British life insurer, Prudential, has today categorically stated that it intends to hold on to its majority stake in the online bank Egg even as the latter announced an increase in nine-month profits.
Prudential's new chief executive Mark Tucker announced that besides retaining its stake, the company might be moving to take over Egg. "The Egg brand is well known, and customers over the last five years have remained loyal to that brand. To build on that is something we would want to do," said Mr. Tucker.
Egg itself had a great day as the nine-month results were resoundingly in its favour. Pre-tax profits for the first nine months of the year stood at £32.8 million as compared to the £105.4 million loss reported at the same time last year. Last year's accounts were hit by the sale of the French wing of Egg which put the company behind by £147.3 million.
However, profits for the current year in the UK were less than flattering as they fell from £49.7 million to £40.9 million. Egg said these figures reinforced the fact that the lending market was highly volatile and that there was an increased level of bad debt. Card balances were the worst affected and grew by only £14 million in the third quarter as opposed to £291 million reported at the same time last year.
Commenting on these figures, Egg's chief executive Paul Gratton said, "We continue to put the quality of loan business we are writing ahead of volumes, and at current penetration rates on associated insurances we will continue to focus on ensuring we have the optimum credit and value-based scoring in place." He added that Egg had participated in the strategic review conducted by Prudential and looked forward to working closely with the parent company.
Posted
on : Thu, 27 Oct 2005 06:45 GMT | Banking News
By : Mark Richardson
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