Strong sales in Egg's insurance arm pushed the internet bank's year end profits beyond market expectations.
Egg announced today that it made an operating profit of £74m at its year end compared with £73m last year.
Analysts had predicted that profits would be significantly lower between £67m and £71m.
Revenues had increased by almost 20% to £497m, but the banks efforts to rid itself of unsecured loans over mortgages led to a high increase in bad debt provisions, which rose 44% to £182.4m compared with the £126.7m in 2003.
Egg said general insurance sales in the fourth quarter had been “much higher” than expected, adding £1.5m to its annual revenues.
The company has endured a turbulent year with its major shareholder Prudential looking to sell of the division.