Yorkshire acquires rest of internet bank Egg from Citigroup

UK's Yorkshire Building Society has acquired the rest of internet bank Egg from Citigroup, after Egg's credit card business was sold to Barclaycard earlier this year. The building society would take over the mortgage and savings business in the autumn, subject to court approval.

The company also acquired the Egg brand. However, it has refused to divulge how much the deal was worth or what plans it had for the brand. The company has essentially bought a £2.5 billion savings book, which would increase its savings business by 9 per cent - and a £430 million mortgage book, according to analysts.

Over the past two years, the company has developed a
multi-brand strategy, picking up struggling rival building societies but maintaining their names. With the Barnsley and Chelsea societies already owned by it, Norwich & Peterborough are set to become part of the group next month, subject to a member vote. Yorkshire currently has a membership of 2.6 million and 178 branches.

The deal could be good news for Egg's 540,000 savings and 12,000 mortgage customers and once the transfer went through, they would become members of the Yorkshire mutual society, giving them full voting rights, even so far as to be able to vote to remove the board.

However, the deal would not come as good news for Egg's remaining 600 staff, based in Derby. According to Yorkshire, it would not take on the workforce, although it would sub-contract the servicing of the Egg accounts to Citi for another year.

According to commentators, the deal would be good for savers and borrowers. They say it looked like a smart move from Yorkshire and the acquisition of a new £2.5 billion savings book would enable one of the most competitive mortgage providers in the UK to expand its lending activities to a much wider audience.