Pru hatches Egg plans for Europe

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The Independent Online
PRUDENTIAL, the life insurer, is close to a decision on plans to expand Egg, its direct banking operation, into continental Europe.The group is evaluating as to whether its priority should be to establish Egg further in the UK first.

However, the question appears to more a matter of when rather than if to take Egg overseas. Sir Peter Davis, chief executive, said: "We haven't come to a conclusion. There is a discussion on whether the priority should be to increase our penetration in the UK or whether to go overseas while expanding in the UK." But, he said: "Taking Egg overseas is clearly on the agenda."

CNP, the French insurance group, which last week signed a reciprocal distribution deal with the Pru, has been following the development of Egg and would clearly like to be able to tap into its expertise. However, the Pru has been careful to leave open its options on the choice of a future partner for an Internet operation.

Egg, which has amassed pounds 7bn of deposits, recently offered a low interest- rate credit card tied to its own online shopping mall. It has plans for an online share dealing service and unit trust supermarket.

Egg is also looking at a radical revamp of its products, which could entail replacing the range with a series of linked products in an attempt to keep its lead in the field.

Attempts by financial institutions to use the Net as a low-cost entry into other markets are still in their infancy, but most industry experts expect a dramatic rise in the number of Internet-based crossborder banks in the next few years.