Internet bank Egg - which has a major office in the Black Country - yesterday said that its UK credit card business had done well as it unveiled a move into the black in the first half.
Egg said card balances grew by five per cent in the six months to June 30, compared with the industry equivalent of two per cent.
The uplift contributed to an overall group pre-tax profit of £15 million in the period against a loss of £1.7 million last time.
The UK arm delivered operating profits of £ 23 million against £35.8 million last time as the impact of a deliberate cut in personal loan sales volumes offset higher credit card income.
Egg said costs had fallen by £10 million, or eight per cent, against the same period last year, with an improving cost to income ratio.
It said that was due in part to restructuring completed in the second quarter, which had aligned costs to the group's new strategy of focusing on the UK consumer.
Chief executive Paul Gratton said the company was planning to launch new products designed to help customers manage their money more effectively.
"Overall, the result for the first half was in line with our expectations and we remain confident about the remainder of the year," Mr Gratton said.
He also reassured investors on bank bad debts, saying the results season would probably show that concern about loan losses was overdone.
"I would be surprised if bad debts were as high as the bears have been thinking," Mr Gratton said. "In our book, performance is exactly as we expected."
The charge for loan losses rose to £117 million from £82 million a year earlier.
Mr Gratton said charges would continue to decline this year, however, following a drop in the second quarter from the first, after Egg tightened lending standards.
Egg and other banks such as Barclays and HBOS have flagged rising consumer bad debts in recent months. Investors are concerned customers are feeling the pinch from increased interest rates and an economic slowdown.
Egg employs about 2,000 people in the UK, at call centres in Derby, Dudley and its London head office.
Takeover speculation has swirled around the group in recent months, with US investment bank Citigroup and US credit card firm MBNA among those reported to be interested. Egg's owner Prudential is thought to be keen to sell the online bank, which made operating profits of £10 million in the first three months of 2005.