Citigroup to divest world's largest net bank, Egg Plc, for £500 million

Citigroup is planning to sell its UK internet bank Egg Plc as part of its plan to hive off billion of dollars of non-core assets in order to spruce its balance sheets after the global financial crisis bought it close to bankruptcy.

Sky News yesterday reported that Egg would be put up for sale by Citigroup with a price tag of £500 million ($750 million).

Derby, UK-based Egg was launched in 1998 as a division of UK life assurance company Prudential Plc and was the country first internet bank.

Prudential floated 21 per cent of Egg on the London Stock Exchange in 2000 and de-listed it in 2006 by buying back the minority stake with an intention to sell it.

Egg, which currently has more than 2 million customers and is the world's largest internet bank, was acquired by Citigroup for £575 million in January 2007 just before the onset of the global financial crisis.

Egg is part of Citi Holdings, the non-core division Citigroup that was created when the firm was bailed out by the US government in the aftermath of the banking crisis.

Citi, which has been holding informal talks with potential buyers for Egg for some time, could begin the sale process with an auction next month and could attract potential buyers like Spain's Santander Bank, Tesco's Metro Bank and other UK and global groups, the Financial Times reported today.