Credit card boom helps Egg surf into profit

Egg, the four-year-old internet bank, yesterday celebrated its first reported profit as customer growth in its booming credit card business accelerated during the first quarter of 2002. Its shares closed at an all-time high.

Quarterly pre-tax profits were £4.1m, against a loss of £37.2m in the same period last year. Egg began trading profitably in during the last three months of 2001, in line with its business plan.

Paul Gratton, the chief executive, said the recruitment of 157,000 new credit card customers, up from 154,000 the previous quarter, had exceeded the bank's expectations. However, he said there was still a discount in the group's share price reflecting the relative immaturity of the business.

"We have always said we are a long-term play," he said. "You shouldn't judge us against Lloyds and Barclays."

While credit card balances rose £145m to £1.9bn, aggregate savings deposits fell, by £345m to £5.3bn.

Shares in Egg rallied in line with the sector, gaining 15p to 182p to value it at £1.5bn.

Mr Gratton said there were further acquisition opportunities in Europe to build on its purchase of France's ZeBank.