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30 May 2024

Citi’s web bank withdraws cards from riskier clients

By Agencies


Egg, the Internet bank owned by Citigroup, will withdraw credit cards from 161,000 customers following a risk review, a spokesman for Egg said on Saturday.


The company has given 7 per cent of its credit card customers 35 days' notice that it was ending their card agreements, he said.


"The credit profiles of affected customers had deteriorated between the time they joined Egg and the acquisition (by Citigroup) in May," Egg said in a statement. "The decision to end these customers' agreements was taken after conducting a one-off, extensive risk review of our (customers)..."


The move marks another example of how banks are revising their lending criteria amid the credit crunch.


Earlier this week, Britain's Financial Services Authority said in an annual review that UK banks face their toughest conditions since the 1990s due to escalating consumer defaults.


The customers affected will not be able to use their Egg credit card once the notice period has ended, although they can continue to make minimum monthly repayments or pay up in full.


"Egg is not asking for immediate repayment of balances or making any changes to their current terms and conditions or interest rates," the company said.


Citigroup bought the business from Prudential in May, 2007. (Reuters)