E*Trade Launches E*Trade Bank, Seeks to Open New Accounts
4/4/00 5:55:00 AM
Source: Bloomberg News
Menlo Park, California, April 4 (Bloomberg) -- E*Trade Group Inc., the second-largest Internet brokerage, today rolled out E*Trade Bank, and begins a campaign to open bank accounts for its brokerage customers.
E*Trade Bank is a product of the Menlo Park, California-based brokerages purchase of online bank Telebanc Financial Corp., which was completed in January. Adding banking services is expected to help E*Trade attract new customers, and reduce its reliance on trading commissions for revenue.
In the quarter ended Dec. 31, trade commissions accounted for 62 percent of $246 million in revenue in the quarter ended Dec. 31, up from 52 percent a year earlier. Combining financial results with Telebanc the ratio falls to 42 percent of $365 million in revenue, while interest income accounts for 44 percent.
'In this first phase of the E*TRADE Bank roll out, our strategy is to target E*Trade's current base of brokerage customers by building on the cross-marketing momentum we've created in recent months,' Mitchell Caplan, E*Trade's chief banking officer and former chief executive of Telebanc, said in a statement.
E*Trade's shares fell 8.9 percent to 27 7/16 in Nasdaq trading yesterday. Email this story to a friend Click for printer-friendly format |
