Europe's largest Internet bank Egg has posted narrower third quarter losses and says its core business remains on course to break even during its fourth quarter.
"With revenues growing strongly quarter-on-quarter and costs remaining flat, we are moving confidently towards profitability," chief executive Mr Paul Gratton said in a statement.
Egg posted third-quarter results including an 18.4 million pounds sterling pre-tax loss in the three months to September, down from 25.5 million pounds in its second quarter.
The loss was at the top end of analyst forecasts and took Egg's total pre-tax loss in the first nine months to 82 million pounds versus 115 million pounds in 2000.
In early morning trading in London, Egg shares were down 6.62 per cent at 141 pence sterling, valuing the firm at 1.1 billion pounds. It has outperformed the FTSE bank sector index by 35 per cent this year.
Keeping costs flat, Egg added 83,000 customers in its third quarter, taking the total to 1.8 million, up from 1.2 million a year earlier. Around two-thirds of Egg customers have credit cards, while about a third are depositors. Mortgages, personal loans and other financial products make up the balance.
"The credit card portfolio is performing well, with margins continuing to grow," Mr Gratton said. "We are pleased to note the continuing high levels of customer retention post the expiry of introductory offers." Egg charges no interest for an initial period on credit card balances transferred to it.
That said, Egg said it had "taken prudent action by increasing our general bad debt provision on cards to reflect resulting macroeconomic concerns" in the wake of the September 11th attacks in the United States.
Mr Gratton said talks with possible partners in Europe were "progressing, albeit more slowly than we had hoped".
He also said an organisational review to "ensure that Egg is properly equipped for the challenges ahead and firmly focused on our strategic goal" would lead to a final quarter charge of about two million pounds.
Egg was floated in June 2000 and is still 79 per cent-owned by Prudential, Britain's second largest life insurance company.