Egg says credit quality remains strong
Leading European online bank Egg said its credit quality remains strong despite recording a rise in charges for bad debt from last year.
Pre-tax losses for the year 2001 fell to £87.8 million sterling, down from 155 million a year ago. Operating income rose to £189.4 million from £93.2 million a year ago.
Operating income was helped by higher prices on some products and a rise in customers using accounts with higher interest rates than introductory rate offers for new credit card users.
Concerns over bad debt have hit leading banking shares this month. Egg said its charge for bad debts was 68 million pounds, up from 37.2 million a year ago, but the bank said its credit quality was "strong, with low and stable arrears levels".
Interest rates at historically low levels and low unemployment have buoyed consumer confidence and credit-card spending in Britain despite a global economic slowdown. Egg said on Monday it now had over two million customers.
Shares in Egg closed at 140 pence on Friday. The stock has underperformed the FTSE banking sector by about 10 per cent over the past six months.