British Internet bank Egg beat expectations to post a rise of over 1 per cent in operating profits at its core UK business today, amidst strong sales of loans and insurance.
The bank has been cross-selling loans and general insurance to its customers amid tough competition in its core credit card market, but cautioned the pace of sales growth of such products will slow in 2005 as it tightens its lending criteria.
Egg said it made an operating profit at its UK business of £74 million pounds, compared with £73 million last year.
The consensus of analysts' forecasts was for £69 million, with forecasts in a range of £67-£71 million.
The company has refocused attention on the UK after the distraction of offloading its loss-making French business last year and the furore surrounding majority owner Prudential's failed attempt to sell it.
The bank said it was ahead of schedule for its withdrawal from France and the exit costs were in line with its previous estimate of around £113 million pounds.
Egg said its charge for bad debts in 2004 was £182.4 million pounds compared to £126.7 million in 2003 due to a greater stock of personal loans on its books.
It said the new European accounting rules introduced for 2005 accounts will not have a material impact on its 2005 earnings compared with the current market consensus.
The impact on shareholder funds is expected to be a reduction of less than 5 per cent.