Jobs threat as 'Egg' set to be broken up
Monday 25 July 2011
One of the UK's first and best-known internet banks was broken up today in a move threatening up to 600 jobs.
The sale of Egg's mortgage and savings operations to the Yorkshire Building Society comes four months after its US owner, Citi, offloaded the brand's credit card business to Barclays.
Yorkshire will acquire the Egg name but will not take on the company's 600-strong workforce, which is largely based in Derby.
An unspecified number of staff will be retained by Citi under an outsourcing agreement with Yorkshire until the end of 2012.
Once the deal completes later this year, existing Egg customers will become members of Yorkshire.
Egg was set up by Prudential in 1998. Current owner Citi acquired the business from Prudential for £575 million in 2007 before the credit crunch and recession meant it required a US government bail-out.
Egg's remaining operations comprise a £2.5 billion savings book and £430 million of residential mortgages.
Yorkshire said the savings book will enhance its funding position and capacity to lend, while boosting its product range.
No price for the acquisition was disclosed.
Yorkshire has been on a major expansion drive in recent years, which has seen it acquire rival building societies Barnsley and Chelsea, while it is currently awaiting approval for a merger with similar-sized Norwich & Peterborough.
The Bradford-based group, which has 2.6 million members and 178 branches, has also been mentioned as possible buyer of some or all of Northern Rock, the bailed-out bank put up for sale by the Government.
Chief executive Iain Cornish said it would be a priority to provide Egg customers with a continuation of service and administration standards.
Citi said it was also committed to working with Yorkshire on a transfer of the customer accounts, adding that the consultation process was ongoing to decide the appropriate level of staffing.
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