Egg breaks into profit
13 December 2001 | 3247 views | 0
Internet bank Egg says it has moved into profit for the first time on the back of a surge in third quarter customer acquisitions and strong revenue generation in its credit card business.
Following the slowdown in customer growth during September, Egg is boasting a highly successful Q4 with 129,300 net new customers acquired to date. Total net new customers this year now stand at 569,000, beating the 559,000 acqusitions achieved in year 2000. As of 10 December, Egg's total net customer base amounts to 1.92 million.
Egg, which reported a third quarter loss of £18.4 million pounds, says the management accounts for November showed that it had made a profit for the month, in line with its long-standing commitment to break-even by year-end 2001.
Egg identifies the credit card business as one of the key drivers of sustainable profits in the future. Cards have been making a positive contribution since 1 October 2001, says the bank, as the book is now large enough to earn sufficient revenues to cover ongoing operational, marketing and bad debt costs in addition to the costs of the up-front incentive offers on the product.
Egg's preliminary results for the year ending 31 December 2001 will be released to the London Stock Exchange on 25 February 2002. The company - Europe's largest standalone Internet bank - was floated by UK insurer Prudential in June 2000. The Pru still holds an 80% stake in the venture.