26 October 2005

Prudential announces plans to keep Egg

Prudential has announced plans to retain its majority share of Internet bank Egg.

The announcement came as Prudential, the UK’s second-largest life insurance company, announced a 27% rise in sales in the nine months to September to £1.6 billion.

Mark Tucker, Prudential’s new chief executive, announced that the company would retain its 79% stake in Egg. He said that the Internet bank had built a “strong customer franchise, with over 3 million younger, more affluent customers.

“Egg also provides the expertise and infrastructure as our entry point into the highly profitable personal savings and loans market.”

The decision comes as Egg announced a rise in UK profits in the three months to September of 29%, increasing to £17.8 million, compared with £13.1 million last year.

The internet bank said that the results represented a “solid performance” in a highly competitive unsecured lending market”.

Mr Tucker said that Prudential was now considering whether to acquire the remaining 21% of Egg, possibly through a share exchange.

Prudential had previously attempted to sell Egg, but withdrew the plans after failing to attract a suitable buyer.

(KMcA/SP)