Citigroup is likely to hang on to Egg's online banking platform and technology development team after buying the online bank from Prudential for £575m last week, according to a senior analyst.
Although mergers often lead to consolidation of online platforms, Citigroup may want to keep the loss-making Egg's systems because it does not have equivalent systems adapted to the European regulatory environment, said Ralph Silva, senior analyst at research firm TowerGroup.
Similarly, Citigroup is likely to want to retain Egg's UK-based development team, Silva said.
"It is one of the best online development teams in the world. Citibank would be unwise to let them go. They have a much better chance to stick around if they can help Citigroup outside Egg, and that will depend on whether Citigroup is patient enough to find out what their skills are. But it is a pretty smart bank."
In 2004, Egg used agile programming techniques to upgrade its Money Manager product in three months. Under the methodology, software is developed in discrete blocks, with a user from the general business involved in the IT project from the outset to ensure the system produced meets business requirements.
George Awad, chief executive of Citigroup Global Consumer Group EMEA, said of the deal, "We like Egg's brand, we like Egg's platform, we like Egg's customer engagement model, and we like Egg's customer set. We will deliver growth by combining Egg's leading-edge online products and distribution with Citigroup's global banking expertise and scale."
Egg saves with agile developmentCitigroup
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