MD writes ...

Egg plc, the accident-prone credit card lender owned by Prudential plc ("The Pru") posted another very disappointing set of figures on 23 February. Yet the market reacted more benignly than a realist would expect. Quite why "Chief Executive" Paul Gratton has survived the disaster in France beggars belief - Egg are writing off £113m on top of the loss in France for the year of £35m.

Ditto could be said of Pru Chief Executive Jonathan Bloomer who should have fired him. So having not done so in 2003 he's now allowed Gratton to go for growth in the year just completed. Wonder what they were thinking at the time...

JB: So, Paul how are you going to get us out of this mess in France?

PG: Well Jon, as you know after years of credit expansion in the UK the market is still all to play for. So I think we'll go for growth in the sub-prime market.

JB: Great idea! It worked for HSBC! And if it doesn't work out we'll both fall on our swords.

Some months later...

JB: How'd it go?

PG: Well, the good news is we will only have to write off £113m in France - like we said first time. Plus the P&L charge of £35m and the loss of £89m there last year. So we took a pretty good spanking really. To address this I thought we should go for growth but clearly the incentives were a bit awry 'cos we've written some really awful personal loan business in a generally benign UK market. I've had to increase provisions to 6.2% but - hey - who cares? The analysts don't seem to have noticed!

JB: JHC! [scribe's shorthand for a well-known historical figure] Are you sure the analysts won't notice?

PG: Yep - but they may notice we also wrote off another £21m exiting other businesses and spent £5m restructuring.

JB (getting nasty): I hope you've put something by for your own package!

PG: JB? JB!!!

[Editor: Save some of that magic for your next jobs, boys]

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