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Egg chief executive steps down after PR disaster

LONDON - The chief executive of Egg, Ian Kerr, has resigned after a PR blunder which led to more than 160,000 customers having their credit cards cancelled last week.

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Egg parent company Citigroup said last night that Kerr was stepping down, after 15 months in the job, but it claimed the move was unconnected with the customer backlash the online bank has faced over the past month.

His departure follows that of Egg chief marketing officer Alison Wright, who left the company last month without a job to go to.

In February, Egg wrote to 161,000 customers -- about 7% of its 2.3m client base -- to tell them their cards would be stopped because their credit profiles had deteriorated. The accounts were cancelled last Thursday.

Many of those notified complained to the press, suspecting Egg had taken the action because it makes little profit from their accounts.

The bank defended the move at the time, saying its review was "robust and fair" and was not an "excuse to get rid of unprofitable customers".

It said the decision was the result of a strategic review of the business by its new owner, Citigroup, which bought the 10-year-old online bank from Prudential for £540m in May last year.

The Labour MP for South Edinburgh, Nigel Griffiths, had complained to the Financial Services Authority and the Office of Fair Trading about the move.

Reacting to Kerr's resignation, Griffiths told Reuters: "Egg presided over a PR disaster. I warned the company that their letter to customers was a serious mistake and urged them to make public a full explanation. Sadly my advice was ignored."

Kerr will be replaced by Bert Pijls, who moves from the company's Czech Republic office to take on the role of country business manager for the UK.

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