Egg to cut 70 UK jobs; seeks partner in France

Egg to cut 70 UK jobs; seeks partner in France

Internet bank Egg is cutting 70 jobs in the UK and is ready to close its struggling French business unless it finds a joint venture partner.

The Web bank's French business recorded losses £69.5m in the first nine months of the year, which plunged the entire group into the red. Group loss before tax for the period was £24.9m.

Egg says the UK job cuts will cost about five million pounds and save about seven million pounds a year.

Despite increasing speculation that Egg was ready to make a clean break from its French arm, the bank says it wants to keep the business but the investment needed is more than it is prepared to undertake alone.

In a statement, Paul Gratton, CEO, Egg, says: "We believe it is in the best interests of Egg's shareholders to form an alliance with a strategic partner and accordingly, we are in negotiations which may lead to a joint venture or other transaction."

Gratton insists that there is still an opportunity in France for a brand such as Egg to develop a valuable business and says negotiations with interested parties should finish by the end of the year.

Egg has more than three million British customers and its UK operation delivered a profit before tax for the nine months to September of £56.7 million, compared to £21.0 million for the year ago period.

The online bank has struggled in France since launching its La Carte Egg credit card almost a year ago after buying French Internet bank Zebank for five mliion pounds.

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