Egg acquired 362,000 net new customers in the first half of 2002, and turned last year’s GBP63.4 million loss into a pretax profit of GBP1.2 million. It’s also improved its cross-selling efforts, signing up its credit card consumers to higher-margin products. As long as it can continue this trend in the UK and elsewhere, Egg looks set to increase its presence still further.
Online bank Egg has reported a strong half-year performance from its core UK operations.
UK online bank Egg appears to be going from strength to strength, reporting a pretax profit for the half-year of GBP1.2 million, up from a loss of GBP63.4 million a year earlier
While UK online rivals such as Smile, Cahoot and Intelligent Finance are not doing badly by any means, they have not achieved the scale that Egg has done. Egg now has more than 2.3 million customers. Its highly successful Egg card now has 1.7 million customers and more than 5% market share of card balances in the UK.
Other Egg divisions also reported strong growth. For example, Egg had 116,000 personal loan customers in June 2002, with disbursements for Q2 up 29% on Q1 2001 at GBP150 million. Egg Invest gained 5,000 more customers during the quarter and Egg Insure gained 12,000 more, taking its customer base to 44,000. Travel insurance is also the most popular product sold via Egg’s supermarket concept.
So what’s next for Egg? There are still opportunities in the UK. Although Egg has announced that its co-branded Advantage Card with Boots is to be discontinued in October, a tie up with another retailer would give Egg the physical presence necessary to attract customers not keen on Internet banking.
There are also opportunities for Egg abroad. Egg announced in May that it had completed the acquisition of French Internet bank Zebank, after receiving the necessary approvals and licenses from Banque de France. Egg will now be launched in France later in 2002. If French consumers warm to Egg, then we could well see Egg all over Europe.
Related research: Datamonitor, Online Customer Management and Cross-Selling in FS (DMFS1441)
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