E*TRADE Expands Relationship in Germany to Capitalize on Market's Growing Online Investing Opportunities
10/18/99 5:25:00 AM
Source: Bloomberg News
E*TRADE Germany AG Joint Venture Combines Brokerage and Investment Banking
Expertise to Advance E*TRADE's Global Expansion Strategy
MENLO PARK, Calif., Oct. 18 /PRNewswire/ E*TRADE(R) Group Inc. (Nasdaq: EGRP) today announced that it is expanding its current licensing agreement in Germany with the creation of a new joint venture that will capitalize on that market's strong growth opportunities in electronic personal financial services. E*TRADE will retain major control in the new joint venture -- E*TRADE Germany AG -- which will include Berliner Effektenbank AG and New York Broker Germany AG. Terms of the transaction were not disclosed.
According to a recent study by J.P. Morgan Securities Ltd., Germany has Europe's most advanced discount broking industry, with tremendous potential for continued expansion. By the end of 1998, there were 7.5 million Internet users in Germany, representing only nine percent of the population. J.P. Morgan expects this number to grow to more than 27 million by the end of 2002. Similarly, the study anticipates the growth of online brokerage accounts from 200,000 at the end of 1998 to nearly 3 million by 2002.
"Through this joint venture company, E*TRADE is joining together with its local partners to strengthen its ability to aggressively develop a premiere online personal financial services web site for the retail market in Germany," said Judy Balint, president and chief operating officer of E*TRADE International. "The combination of E*TRADE's global brand, products and services with the significant local presence of Berliner Effektenbank AG should make for a formidable new entrant to the German online investing market."
Berliner Effektenbank AG was founded in 1998 and operates as a publicly listed financial holding company with a concentration on investment banking services, including private banking and corporate finance. Through its parent company Berliner Effektengesellschaft AG, Berliner Effektenbank AG maintains a relationship with Berliner Freiverkehr (Aktien) Handel AG, which is associated with the traditional stock brokerage business and offers TradeGate, the world's first Internet-based OTC information and trading platform.
"E*TRADE brings an established global presence and aggressive international growth strategy to the joint venture," said Dr. Guido Sandler, chief executive officer of Berliner Effektenbank AG and a member of the Board of Directors of Berliner Effektengesellschaft AG. "We're excited about moving this venture forward and tapping the potential for retail online investing in Germany."
E*TRADE Germany AG, which will be located in Berlin, currently is preparing to file for a full banking license - a precursor to operating a retail brokerage business in Germany. In addition, the joint venture company has initiated composition of the technical infrastructure, which will model E*TRADE's proprietary Stateless Architecture(SM).
E*TRADE's global expansion strategy, which includes the recently completed acquisition of TIR Holdings Ltd., calls for the establishment of the world's first cross-border trading network. Eventually, E*TRADE expects customers on all E*TRADE-branded sites worldwide to trade around the clock on both domestic and international markets.
About E*TRADE
E*TRADE, a global leader in online personal financial services, is the world's most-visited online investing site, offering value-added investing and research features, premium customer service and a fully redundant, proprietary Stateless Architecture(SM) infrastructure. E*TRADE has continued to extend its customers' financial services experience through the acquisition of ClearStation, a community-based financial analysis site, and its pending merger with Telebank, the nation's leading branchless bank. E*TRADE is also expanding its value proposition through strategic investments in E*OFFERING, a full-service online investment bank, and Archipelago, a leading Electronic Communications Network (ECN).
E*TRADE plans to expand its global presence by launching branded web sites in the top 20 financial markets worldwide, and has taken a key step toward becoming the first online global trading network with its recently completed acquisition of TIR Holdings. E*TRADE presently has branded web sites in Japan, the UK, Sweden, France, Australia and Canada.
E*TRADE has been ranked the number one online brokerage by Gomez Advisors for four out of the last five quarters, Lafferty Information and Research Group, PC Magazine and Smart Computing magazine.
E*TRADE Securities Inc. (Member NASD/SIPC), and its parent company, E*TRADE Group Inc., have offices in Northern California and in other major business centers in the U.S. and worldwide.
Important Notice
E*TRADE is a registered trademark of the company. All other trademarks are properties of their respective owners. The statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, changes in market activity, market acceptance of the Destination E*TRADE web site, anticipated increases in the rate of new customer acquisition, the conversion of new visitors to the site to customers, seasonality, the development of new products and services, the enhancement of existing products and services, competitive pressures (including price competition), system failures, economic and political conditions, changes in consumer behavior and the introduction of competing products having technological and/or other advantages.
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