Yorkshire mops up rest of Egg from Citigroup

Yorkshire Building Society has bought the remains of the internet bank Egg from Citigroup. Egg's credit card business was sold to Barclaycard earlier this year and the building society will take over the mortgage and savings business in the autumn, subject to court approval.

Yorkshire has also acquired the Egg brand but refused to say how much the deal is worth or what plans it has for the brand. It has essentially bought a £2.5bn savings book – which will increase its savings business by 9 per cent – and a £430m mortgage book.

The mutual has in the past two years developed a multi-brand strategy, snapping up struggling rival building societies but maintaining their names. The Barnsley and Chelsea societies are already owned by Yorkshire, with Norwich & Peterborough set to become part of the group next month, subject to a member vote. Yorkshire now has 2.6 million members and 178 branches.

For Egg's 540,000 savings and 12,000 mortgage customers, the deal could be good news. Once the transfer goes through, they will become members of the Yorkshire mutual society, giving them full voting rights, even so far as to be able to vote to remove the board. However, in the currently remote event of Yorkshire demutualising, any windfalls would have to be handed over to charity.

The deal will not be such good news for Egg's remaining 600 staff, based in Derby. Yorkshire said it would not take on the worforce, although it will sub-contract the servicing of the Egg accounts to Citi for another year.

Commentators said the deal would be good for savers and borrowers. Andrew Hagger of Moneynet said: "This looks like a smart move from the Yorkshire. The acquisition of a new £2.5bn savings book will enable one of the most competitive mortgage providers in the UK to expand its lending activities to a much wider audience."

Kevin Mountford of Moneysupermarket said: "This is a decent chunk of deposits at a time when banks have to increase liquidity. Yorkshire is already a multi-brand lender, which allows it to be tactical and change rates for one provider but not necessarily across the whole range, and that helps it stay at the top of the best buy tables."

Yorkshire said it would announce plans for the Egg brand by the time the High Court process was completed in the autumn.

Egg has had a chequered history, after being set up as the UK's first internet-only bank by Prudential in 1998. When it was partially floated in 2000 it had a £1.3bn valuation, but it was sold by the Pru to Citigroup in 2007 for just £575m.

Citi bought Egg as part of a strategy to become a significant player in UK financial services. But buying a UK bank in 2007, just before the credit crunch, proved a tough proposition and Citi finally put Egg up for sale last summer, after controversially cancelling the credit cards of 161,000 customers in 2008.

It was unable to find a buyer for the whole bank, and sold 1.15 million Egg credit card accounts to Barclaycard in March and the remaining 550,000 savings and mortgage customers to Yorkshire yesterday. Egg credit card customers will be transfered across to Barclaycard later this year.

Start your day with The Independent, sign up for daily news emails
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Digital Optimisation Executive - Marketing

£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Day In a Page

Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific