Can Citi Unload Its Egg U.K. Internet Bank? (C, PUK)

Citigroup, Inc. (NYSE: C) is still trying to pare itself down to the core-Citi operations.  It is going to take years to carry out.  A story from Sky News in the U.K. is signaling that Egg, Citi’s internet banking operation, is going to be put up for sale.

If you can remember the old NetBank here, it is very similar.  The difference is that Egg survived and still exists.  Citi completed the acquisition of Egg from Prudential plc (NYSE: PUK) for some 546 million pounds in 2007.  That was about $1.09 billion at the time.  The sale price estimated by Sky News: 500 million Pounds, or about $800 million today.  This may sound like a bad investment on the surface, but you have to consider that in 2007 Citi was a $40 and $50 stock versus less than $5 today.

This is all part of Citi’s paring down strategy.  It is part of why we have Citigroup as one that could still double and part of why Bill Ackman sees the Core-Citi being worth far more.

Hoovers describes Egg as one of the largest Internet-only banks in the world with 3 million customers for mortgages, personal loans, savings accounts, unit trusts, and life, health, auto, home, and travel insurance.  The firm was founded in 1998.

Will it fetch 500 million pounds?  We’ll see.  Citi shares are currently down less than 1% at $4.16 and the 52-week range is $3.11 to $5.43.

JON C. OGG