Prudential has flogged its online operation Egg for less than half the amount it valued the loss-making internet bank 12 months ago.
Citi – part of the Citigroup – shelled out £546m, despite the Pru valueing the business at £900m last year when it bought out minority shareholders.
Egg boss Ian Kerr will move to Citi as part of the deal and will run both the internet business and Citi UK Consumer, which together have more than four million customers.
The former retail banking chief executive at Halifax Bank of Scotland joined Egg as CEO last November.
He is bullish about prospects for the combined business.
“We will use our shared knowledge an expertise to provide a broader range of products and distribution from online through to branches," he says.
A spokesman says it is too early to specify what new products could be launched but adds: “We will be looking close at our strategy and the possible synergy between Egg’s online services and Citi’s existing branch network.”
Citi has five retail banking and 49 consumer finance branches. It offers current accounts, wealth management, offshore banking and mortgages. Egg’s online proposition includes credit cards, personal loans, savings accounts and insurance products.
Citi has been busy on the acquisition trail in 2007 as it looks to strengthen its position in the UK financial services market. In February it took over wealth advisory firm Quilter and folded it into its Global Wealth Management business.
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