Egg Banking plc
Encyclopedia
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 card
s and general insurance
but no longer offers loan
s or mortgage
products.
. 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
.
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.
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.
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.
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.
.
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
.
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. "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.
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.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
internet bank
Online banking
Online banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.-Features:...
owned by Citigroup
Citigroup
Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate...
, with headquarters in Derby
Derby
Derby , is a city and unitary authority in the East Midlands region of England. It lies upon the banks of the River Derwent and is located in the south of the ceremonial county of Derbyshire. In the 2001 census, the population of the city was 233,700, whilst that of the Derby Urban Area was 229,407...
and London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
. 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 card
Credit card
A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holder's promise to pay for these goods and services...
s and general insurance
General insurance
General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance. It is called property and...
but no longer offers loan
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower....
s or mortgage
Mortgage loan
A mortgage loan is a loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan...
products.
History
Egg was established as a division of UK life assurance company PrudentialPrudential plc
Prudential plc is a multinational financial services company headquartered in London, United Kingdom.Prudential's largest division is Prudential Corporation Asia, which has over 15 million customers across 13 Asian markets and is a top-three provider of life insurance in mainland China, Hong...
. 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
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
, 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
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
and HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
, 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
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
. 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
HBOS
HBOS plc is a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group having been taken over in January 2009...
, in November 2006.
On 29 January 2007 Prudential announced that it had agreed to sell Egg to Citigroup
Citigroup
Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate...
for a consideration of £575 million subject to approval by the Financial Services Authority
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
.
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.
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.
In November 2007 approximately 350 non-specialist roles were moved from the Dudley
Dudley
Dudley is a large town in the West Midlands county of England. At the 2001 census , the Dudley Urban Sub Area had a population of 194,919, making it the 26th largest settlement in England, the second largest town in the United Kingdom behind Reading, and the largest settlement in the UK without...
centre to Derby
Derby
Derby , is a city and unitary authority in the East Midlands region of England. It lies upon the banks of the River Derwent and is located in the south of the ceremonial county of Derbyshire. In the 2001 census, the population of the city was 233,700, whilst that of the Derby Urban Area was 229,407...
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.
On 25 July 2011 Egg announced the proposed sale of all savings and mortgage accounts to Yorkshire Building Society
Yorkshire Building Society
The Yorkshire Building Society is the second largest building society in the UK, with its headquarters in Bradford, West Yorkshire, England. Assets now exceed £20 billion....
. This would complete Citigroup's sale of the Egg business.
.
La Carte Egg
Capitalising on its British success, Egg launched in FranceFrance
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan 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
ING Group
The ING Group is a global financial institution offering retail banking, direct banking, commercial banking, investment banking, asset management, and insurance services. ING is the Dutch member of the Inter-Alpha Group of Banks, a cooperative consortium of 11 prominent European banks...
of the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
.
Controversy
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. 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.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. "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.
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.