Egg, the Internet-based banking, insurance, investment, mortgage and shopping supermarket majority-owned by the Pru, was recently voted the world’s largest purely online bank by Nielsen/Netratings UK audience measurement. Its “unique” audience of 1,507,000 customers at end-October is enough to put it into this category.
Since it was floated on the London Stock Exchange in June 2000, Egg has certainly overcome early doubts about its long term viability. This owes something to the fact that the giant Prudential continues to hold 79 per cent of the share capital, but its core UK business is also both growing and profitable.
Its most successful product – the Egg credit card – is reassuringly old-fashioned, and Egg claims to be cross-selling loans to its holders. Unsecured lending balances were certainly up strongly in the third and fourth quarters. “The underlying credit quality of the unsecured lending book remains strong and independent benchmarking continues to show that the arrears levels on our card book are significantly lower than the industry average,” says Egg.
Egg has also launched an operation in France, with an advertising campaign securing 28,000 credit card acceptances for La Carte Egg in the first month. Egg says applicants are of higher quality than it expected, with salaries averaging ?50,000, one third above the French average. “Our brand is appealing to a more upmarket base consistent with our experience in the UK,” explains Egg. This is the first major product launch outside the UK.
In the fourth quarter, Egg made a one-off exceptional profit of approximately 3.4 million from the sale of 15 per cent of Funds Direct to the Prudential, as announced in the third quarter.