Prudential cracks Egg sell-off

UK internet success story has been snapped up by US financial services giant Citigroup

UK insurance firm Prudential has agreed to sell Egg, its online bank.

Prudential announced on Monday morning that it has accepted an offer of £575m for Egg from Citigroup, the US financial services giant.

Egg was one of the UK's most high-profile online brands. It was launched by the Prudential in 1998, and claims to be the world's largest "pure-online" bank with no physical branches.

Being based purely online should deliver significant cost advantages. However, Egg has struggled to maintain profitability. It made its first profit in 2001, but last year made an operating pre-tax loss of £145m, according to the Financial Times.

The Prudential had resisted earlier offers for Egg.

"The sale of Egg to Citigroup realises greater value for our shareholders than retaining the business within the group," explained Mark Tucker, chief executive of the Prudential, on Monday. "Citigroup is the largest credit card issuer in the world and sees enormous opportunities to develop Egg's business in the UK."