19 Oct 2004

Egg plc - Results for the Nine Months to 30 September 2004

“The Group result for the year to date is a loss before tax of £103 million, including the previously announced provision of £113 million raised in July for the costs of exiting the French market and the operating losses of £35 million incurred in France up to the date of our announcement of Egg’s intention to withdraw from the market. Our withdrawal from the French market is progressing and as we announced earlier this month we have received approaches for the consumer credit, savings and brokerage businesses which, if concluded, would result in the redeployment of up to 140 people and provide continuity of service to Egg’s customers in France. Our expectations with regard to the total exit costs for France remain unchanged.

“Our UK business has delivered a satisfactory set of results in what has proved to be a challenging year for Egg, with the potential sale process initiated by Prudential in January creating uncertainty in addition to the increased competition and rising interest rates that have impacted the credit card and personal loan markets. We made a profit before tax of £53 million for the nine months to 30 September 2004 compared to the £57 million profit for the same period last year. Unsecured lending balances are growing strongly, with record personal loan drawdowns of over £1.6 billion and our new MasterCard offer is proving successful and helped generate healthy credit card balance growth this quarter.

“Looking forward, Egg people are firmly focused on the future development of our core UK business, leveraging our brand and high quality customer base to expand our franchise. We have recently launched a discount tracker mortgage product and we have an increased focus on general insurance cross sales, given research in our customer base indicates a high propensity to buy these products from Egg. In addition we have taken the opportunity to re-price our credit card portfolio in October following similar action by the majority of our competitors.

“As part of our renewed focus on our core UK business, we announce today the disposal of our funds supermarket, Egg Invest, to Fidelity FundsNetwork. The transaction will result in one-off costs of £3 million and lead to annual savings of a similar amount moving forward.

“We will continue to take actions to secure the significant value inherent in our existing unsecured lending business and given the strong brand consideration that exists among both our customers and the wider UK population we will look to offer a broader range of products in 2005 and beyond.”

Paul Gratton, CEO, Egg plc

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