Egg plc Loses £40m
Bad debts and insolvencies push internet bank into the red
31st July 2006
Internet bank Egg plc have announced a £40m loss for the first six months of the year, largely due to bad debt on its unsecured loans business.
Their sales strategy was to subsidise low rates on its loans with more profitable payment protection insurance sales, a ploy which has seeminglay backfired as rising numbers of personal insolvencies forced Egg's parent company Prudential to increase bad debt provision by 42%.
The bank says it has now tightened its acceptance criteria on personal loans, refocussing its acquisition on more financially stable and creditwirthy customers.
Egg is the UK's largest online bank, with a product range including the egg card, along with personal loans, mortgages, and insurance.
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Products from Egg : Card, Loans, Money, Motor Insurance, Savings Account |
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