PracticeConsultingEgg set to hatch first profits in 2001

Egg set to hatch first profits in 2001

The launch of a co-branded credit card with high-street retailer Boots, has given online bank Egg access to 8.5m customers, as it prepares to record its first profits in the new year.

The launch of the new card helped Egg reverse a third quarter slowdown in new customers, the Financial Times reported today. From 11 October to 1 December, Egg attracted 121,000 new customers compared with figures of 107,000 the previous quarter, an 11% rise.

At present Egg can claim a customer base of 1.33m with more new customers expected to be attracted in 2001.

Analysts said this growth was better than expected, particularly as competition in online banking intensifies, with the likes of Abbey National’s Cahoot, HSBC’s Firstdirect and Halifax’s Intelligent Finance. Already the tough competition has forced Lloyds TSB to scupper plans to launch an online bank.

Egg recorded a reduced outflow in net deposits of £154m in the fourth quarter, compared with an outflow of £443m in the third quarter. Mike Harris, CEO of Egg blamed the poor showing in the third quarter on unfavourable interest rates, which resulted in telephone-based customers closing their accounts.

However he said Egg was attracting new deposit customers to offset the more rate sensitive customers that left the bank in the third quarter. Egg is expected to outsell the 70,000 products they shifted in the third quarter by year-end.

At the time of their IPO, Egg recorded a third quarter loss before tax of £80.7m, compared with a loss of £69.7 in the second quarter. The IPO raised capital of £150m.

Following the disclosure of results in October, Harris said Egg would prosper in a ‘low margin era’. Harris singled out the strength of their brand name and an established customer base as indicators of future success.

A survey by MMXI Europe in September rated Egg as the most frequently visited finance website in the UK.

In June, Egg recorded brand awareness at 79%. Other services successfully launched this year include an online mutual funds supermarket (in March) and a share dealing service (in July).

Egg was last trading at 112p per share, a fall of 1.8%

Links

Lloyds TSB scraps e-bank plans

Life’s not a cahoot for Abbey e-bankers

AccountancyAge.com web directory – banking

Egg cracks online banking fraud

Barclays online bank suffers another blow

How secure are your cards?

Barclays suffers online security breach

MMXI Europe

www.egg.com

Europe leading the way for online banking

Egg tops financial websites poll

Egg website

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer