Citibank (NYSE: C) is rumored to be looking for a buyer for its U.K. based Egg internet banking business, just three years after purchasing it for £546 million.
Several sources have reported that Citi held talks with trade buyers and a private equity firm over the potential sale, which would effectually take Citigroup out of the U.K. retail banking market all together.
Citigroup purchased Debry-based Egg, he world’s largest internet bank, in 2007 before the onset of the recession and the global credit crisis. Egg has been hit hard by the recession as well as competition from other online banking firms. The company posted a loss of £106 million during the second half of 2009.
The rumored sale of Egg is part of Citi’s ongoing effort to sell off non-core business and concentrate on its core operations in order to pay bank the debt that it owes to the Federal Government, which is currently the largest shareholder in Citigroup.
Egg currently has around 1,800 staff members and more than two million customers. The company was founded by Prudential in 1998. After failing to successfully sell the business, Prudential took full control of Egg in 205 by purchasing out minority share holders that valued the bank at just over £900 million at the time.
Following two years of lackluster performance, Prudential agreed to sell the business to Citibank in January of 2007.