| Type | Subsidiary |
|---|---|
| Industry | Finance and Insurance |
| Founded | United Kingdom (1998) |
| Headquarters | Derby, England, UK |
| Products | Financial Services |
| Employees | 1,100 |
| Parent | Yorkshire Building Society |
| Website | http://www.egg.com/ |
Egg Banking plc is a British internet bank owned by Citigroup, with headquarters in Derby and London, England. Egg was born out of Prudential's initial banking arm (Prudential Banking plc), that had been established in 1996. Egg itself was launched in 1998 and is now the world's largest internet bank in that it is only possible to operate an Egg account over the internet, or via their call centre. Egg specialises in savings, credit cards and general insurance but no longer offers loans or mortgage products.[1]
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Egg was established as a division of UK life assurance company Prudential. Prudential Banking was involved in direct selling of savings and mortgage products. In 1998 the division was renamed Egg and relaunched as the UK's first Internet bank. The service gained in popularity, and soon the bank had more than 2 million customers. In 2000 Prudential cashed in on its stake and floated 21% of the company on the London Stock Exchange, retaining 79%. In 2003 Prudential announced its intention to sell its remaining stake in Egg to a third party. Despite rumours of interest from the likes of Royal Bank of Scotland and HSBC, no formal offers were made public, and Prudential dropped its plans in 2004.
Subsequently Prudential bought back the remaining minority share in January 2006 and de-listed the organisation from the London Stock Exchange. Chief Executive Officer Paul Gratton left the organisation in March 2006 to be replaced by then Chief Operating Officer Mark Nancarrow. Mark was subsequently replaced by Ian Kerr, formerly of HBOS, in November 2006.
On 29 January 2007 Prudential announced that it had agreed to sell Egg to Citigroup for a consideration of £575 million subject to approval by the Financial Services Authority.[2][3]
On 1 May 2007 the sale of Egg to Citi was completed and Egg CEO Ian Kerr was appointed head of Egg and Citi UK Consumer.[4]
In early 2008 Ian Kerr left the business and was replaced in March by Bert Pijls. Bert joined Citi in 1990 and has held a number of roles within the bank.[5]
In November 2007 approximately 350 non-specialist roles were moved from the Dudley centre to Derby resulting in redundancies and relocation packages. The Dudley office has now been closed.
On 1 March 2011 Barclays Bank announced that they had agreed to buy Egg's more than 1 million UK credit card accounts from Citigroup. The deal is expected to be completed by the end of June. [6]
On 25 July 2011 Egg announced the proposed sale of all savings and mortgage accounts to Yorkshire Building Society. This would complete Citigroup's sale of the Egg business. [7].
Capitalising on its British success, Egg launched in France in mid 2002. However, despite investing heavily in the French market, the services were never popular with the French, who generally hold fewer credit cards than the British. In 2004, Egg decided to close its French operations, selling the business to ING of the Netherlands.
On 2 February 2008, Egg decided to cancel the credit cards of 161,000 (7%) of its customers. The bank gave customers 35 days' notice, after which they would not be able to spend more on their cards.[8] While publicised as an attempt to purge "risky" customers from their books, many affected customers came forward with claims that they had excellent credit histories. This led to speculation that the move was an attempt to remove customers who did not accumulate interest on their accounts and therefore did not generate profit for the bank.[9]
In December 2008, Egg was fined £721,000 by the Financial Services Authority for persistent misselling of payment protection insurance (PPI) on its credit cards.[10] "Margaret Cole, director of enforcement at the FSA, said: 'Egg used inappropriate sales techniques to try to persuade customers to buy payment protection insurance on their credit card, even when they asserted they did not want the cover.'"
During 2008, Egg tried to have one of its customers jailed, saying the chip & pin cards were 'uncloneable', and the customer was 'clearly lying' about transactions from an ATM. The police arrested the customer, however after much investigation, the case fell apart. BBC Fake Britain reported this story. [11]
Barclaycard took over the Egg credit card business in May 2011 after Citi had spent time trying to sell the business as part of its Citi holdings portfolio. Citi and Barclaycard share the same site at Pride Park but it was announced on 21 June 2011 that Barclaycard would not require to continue operations in Derby and will move ops to their Kirby and Northampton sites, leaving 659 people redundant.
It is likely that in 2012, the Egg brand will end after 14 years in Derby.
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