Egg defied the sceptics yesterday by turning in its first ever profit and pledging to stay in the black from now.

The stemming of losses in November, though, was not enough to propel shares in the quirky on-line bank back up through the 260p at which they were sold to investors last year. The shares closed 6p lower at 148p.

Paul Gratton, chief executive, said he felt the share price would improve as "people's perception of risk changed".

Although Egg is best known for its banking business, just 600,000 of its 1.9m customers have one of its savings accounts and it was pushed towards profitability by its newer credit card business.

Mr Gratton said the credit card operation had turned in a profit since the start of October. But he stressed the whole of the UK operation had been running at a profit in November. Egg did not reveal the extent of the profit which will be published in February.

Among those to be surprised by the claims of profitability were those at Schroder Salomon Smith Barney who think the shares could overshoot their 175p target.