Online bank Egg - which has a major operation in the West Midlands - has revealed a clear-out of senior managers in a £12 million cost-cutting exercise.

Egg, which is majority owned by Prudential, said yesterday the restructuring would result in the departure of its finance director David Doyle in May and the loss of an undisclosed number of management roles company-wide.

It said the cuts - in the aftermath of a disastrous French adventure -- would not affect staff at its centres in Dudley and its main operation in Derby at Pride Park Derby.

The Dudley site employs 400 people, mainly in technical, back office and fraud investigation roles, a spokesman said.

The management roles to be axed were "head office group functions".

Chief executive Paul Gratton will be taking over the group's risk, audit and legal functions following Mr Doyle's departure.

Mr Gratton said: "We will be sad to see David leave Egg, but we extend to him our thanks for his contribution to Egg and wish him well."

Mr Doyle said: "With the company now refocused on its profitable UK business, I am looking forward to new and broader challenges."

Egg said Jonathan Bloomer, who steps down from the Prudential board next month, would also retire from the Egg board from May 5.

Company secretary and group chief legal officer Marcus Ezekiel will leave in May.

Egg said in a trading update that it made operating profits of £10 million in the first quarter while the overall group profit for the period was £5 million. It said its core UK credit card business had performed well, with balance growth of more than £200 million.

As planned, personal loan sales had reduced in the period from the record levels seen in 2004 following the group's actions to tighten its lending criteria.

It said costs continued to be well controlled, although the strong balance growth on cards had had a negative short term effect on revenues due to the funding cost of introductory offers.

Revenues were also affected by the group's deliberate reduction in personal loan sales volumes and hence the lower income generated from selling associated insurances.

The group said it was close to completing a restructuring that would align its cost base to its strategy, which it has refocused on to its core UK business.

It said it had incurred £6 million of restructuring costs in the first quarter and expected a further £4 million to be recognised in the second quarter on completion of its review, which it expects to generate annual savings of £12 million.

Egg decided last year to close its loss-making French operations, which was reflected in annual group pretax losses of £106.7 million last year.

The company said it expected the costs of exiting its French business to be £3 million lower than it had accounted for.

Mr Gratton said the overall result for the period was in line with the firm's expectations.

"We remain confident that operating profit will grow strongly over the remainder of the year," he said.