News Burst: Egg losses rise, yet investors cheer
Published: 16 Oct 2000 10:14 BST
Pioneering UK Internet bank Egg revealed Monday that its losses have risen by seven percent over the last nine months, but promises that it is on track to reach profitability in a year’s time.
Egg said it attracted 120,000 new customers in the quarter, taking its total number of UK customers to 1.2 million. The market responded favourably to the news, boosting Egg's stock price 3.6 percent or 4.5p to 130.5p.
Egg, which is backed by financial powerhouse Prudential, made losses of £34.4m in Q3 and £115.1m. This compares to £108m during last year.
The bank's growing losses could fuel growing concerns about the prosperity of dot-coms in the UK although Egg reassures observers that the figures reflect recent investments in advertising and cross-promotions, adding that profitability is just around the corner.
"In fact this actually shows that we’re on track to break even in Q4 of this year," says an Egg spokeswoman. "Up until now we’ve been putting in place all elements of the business plan and now we’re starting to see the fruits of cross-selling."
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