UK internet bank in talks to buy French Zebank

Egg is in negotiations to buy Zebank, a French online financial business.

Unlike many other internet banks, Egg has managed to achieve profitability and broke even for the first time in November 2001.

However, in order to grow it will be necessary for it to make an acquisition outside the UK and in the past months the company has been seeking such an acquisition in France, Germany and Italy.

Some internet financial services companies have found it difficult to make money.

An example of this is First-e, the internet bank of Banque d'Escompte which closed down last year, causing the closure of the First-e division of Dublin company Enba.

Egg has grown, partly by offering loss-leading deals, and it now has 2 million customers.

The bank is quoted on the London Stock Exchange and is 79% owned by insurer Prudential.

Zebank, owned by Groupe Arnault was launched in February, 2001 and now has 100,000 customers.