British life insurer, Prudential has made a dramatic U-turn selling its loss making internet banking arm, Egg for American financial-services company Citigroup in a deal thought to be around � million, nearly half the � million price tag that the company had valued the business when it bought out minority shareholders in 2005.

The Egg banking system has been a cash drain for the UK insurer group and had estimated to have burdened the company with a � million operating loss last year. The news comes as a surprise to many after Prudential had revealed that it had rejected a mega offer for the internet bank business last month

Pressure will increase exponentially on Pru's Chief Executive Mark Tucker as he tries to find an answer to the company's underperformance in various other UK businesses.

Tucker said that the deal will be profitable to the company as it had looked to pull out of the worsening credit card market in the country. "We concluded, particularly in the light of the challenging conditions in the consumer credit market, that a sale of Egg would realize greater value than would be achievable through retaining the business", he said.

Citigroup has been showing keen interest in Egg ever since it was started, according to George Awad, the chief executive of Citigroup Global Consumer Group for Europe, Middle East and Africa. "It's a deal that is a win for us and a win for Prudential. Citigroup has watched Egg every day since it was (founded)", he said.

This is the second such purchase by Citigroup in two months as the American financial firm looks to increase its presence in Britain. The purchase of Egg will add about 2.9 million cardholders in UK and will add to earnings in the first year.

Shares of Prudential rose initially following the news of the sale but closed down 0.6 percent at 698 pence a share at the end of the trading.

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