Internet bank to make a loss

A cut in spending by UK consumers forced insurer Prudential to admit today that its Egg internet banking arm would make a half-year loss.

As well as lower-than-expected borrowing levels, the Pru said levels of bad debt – particularly in relation to personal loans – had exceeded forecasts.

It said there had been a marked increase in consumers using individual voluntary arrangements, debt management companies and in some cases bankruptcy to alleviate their debt burden.