Egg (Citigroup)

Paul_Herring

If banks continue to fail at what point will the FSA no longer be able to pay compensation?

Probably at the point at which your fiver is worth less than the paper it's printed on because the whole of the society will have collapsed, let alone the economy.

Lynt_3

Megalomaniac wrote: »

Sell it back to the Pru

Why did Pru sell it in the first place?

sabretoothtigger

We may have to scrap the idea of printed notes but in the meantime egg has a uk license so your ok upto 50k.

Citi has the backing of a arab prince if its any comfort, he backed them in the early 90's when they were quoted at close to 1 dollar a share. Right now they are still 3 dollars or so



So the lowest for 16 years which is about the same as all our uk banks.

If you had invested $1500 in 1990 and sold in 2000 you would have had $58k returned to you and another $14k in dividends alone. 4,700%
Investing in the ftse100 over the same time would have about doubled your money, 250%

frames1_uk

Paul_Herring wrote: »

It could be just me, but I failed to see any mention of "passport scheme" or "top-up scheme" in that article.

no, no... I just meant if the bank failed, waiting to get the cash back (like with Icesave)

Lynt_3

http://www.nytimes.com/2008/11/22/business/22citi.html

Getting really twitchy now.

sabretoothtigger

Life insurer Prudential has sold its loss-making internet bank Egg to US banking giant Citigroup for £575m.

operating loss of £145m last year.

new business sales rose by 16% last year to £2.47bn. The increase in Prudential's sales was mainly driven by growth in the US and Asia, with overall UK sales up by just 1% to £900m.

http://news.bbc.co.uk/1/hi/business/6309731.stm

Life insurer Prudential has agreed to buy the 21.7% stake in internet bank Egg it does not already own. The deal values Egg shares at 118 pence each, giving the bank a value of about £973m ($1.68bn)

http://news.bbc.co.uk/1/hi/business/4487456.stm

Andrew64

frames1_uk wrote: »

no, no... I just meant if the bank failed, waiting to get the cash back (like with Icesave)

I see your point. Although it's unlikely that Citibank would actually go bust, if it did there would be that long nervous wait to get your money back from the FSCS.

If you're worried, make sure you have less than 50,000 there, and also make sure that its money you can do without for two months.

Lynt_3

I was about to add to my 6.3 fixed, but have decided to put it in Northern Rock e saver instead, which I opened a few days ago. The rate is 5.15% (at the moment), but I can sleep at night.

I've been with Egg for years: it would be sad if they go.

wagdog

Andrew64 wrote: »

However, there is talk about Citibank selling assets and Egg could be one. So, at worst, you may just find that Egg is transferred to another bank.

Which is a good reason for the ultra-paranoid to reduce their account balances to half the FSCS limit. The £50K protection is per institution not per account (and not per bank either). If you cannot tolerate the risk of being above the compensation limit even for a few days should an institution you already bank with buy Egg off Citi, and also decide to bring the new asset under the same institutional registration with the FSA, then it would be prudent to reduce all bank balances to £25K. That will ensure you have adequate time to redistribute your savings before the next banking shock hits.

apt

Egg has always been a better company for customers than owners who have tended to make losses even in the good years. The Pru lost a pile of money trying to break into the French market. I doubt the American govt can afford to let Citigroup go belly-up as that would create a massive crisis - much worse than Lehman Brothers. The 5.15% NR account looks a good option for those who want as much security as possible, but the rate is probably going to drop by at least 1% at the start of December.