Egg soldiers on leaving rivals for dead

NEWS Online bank Egg said today it has attracted over two million customers since it was launched, outstripping its nearest rival by over 1.5 million. Smile (backed by the Co-op) claims to have 400,000 customers, according to figures from October 2001. The Halifax's Intelligent Finance (IF) operation claimed to have 242,000 customers in its last quarter, while Cahoot managed to assemble just 40,000 customers in the first six months following its launch in June 2000. However, it now has 300,000 customers in all. Egg registered 60,000 new customers during the year - many of them attracted by the bank's credit card offering - and added a further 22,000 new customers in the last two months between 31 December and 21 February 2002. Over 1.3 million customers held an Egg credit card by the quarter ending 31 December. But the reliance on favourable credit card conditions to attract customers has also had a negative impact, with bad debt provision almost doubling, from £37m to £68m. The company also saw total costs rise two per cent to £132m, as spending on overseas investment increased. The company is hoping to attract one million customers in France over the next three years after paying £23m for French online bank Zebank. Charlotte Hamiltion, analyst at Forrester Research, believes Egg has the right strategy for long term survival. She said: "Egg has tried to keep a consistent strategy, and it has always had a strong innovative nature. It is trying to win customers by offering a wide range of products and expanding overseas, and by outsourcing non-core services. It is a point to learn for other banks." Losses for full 2001 fiscal year were down to £83.8m, from £153.6m in the previous year. Revenue was up to £189.4m from £93.2m in the fiscal year 2000.