ARLINGTON, Va. -- E*TRADE Bank, a wholly-owned subsidiary of E*TRADE Group, Inc. (NYSE: ET - news) and the nation's largest branchless bank, announced the execution of a definitive agreement to acquire more than 33,000 customer accounts with deposits currently valued at more than $1.5 billion from Chase Manhattan Bank USA, National Association, a subsidiary of J.P. Morgan Chase & Co. (NYSE: JPM - news).
According to a news release, the acquisition is expected to be accretive immediately to both revenue and earnings. The addition of the new retail deposits, which are almost entirely transaction-based accounts, is also expected to continue to widen the bank's interest rate spreads while increasing the bank's revenue per household, enhancing overall profitability.
Also according to the release, E*TRADE intends to cross-sell its other high-value financial products and services to what it calls an affluent customer base.
"The acquisition of Chase USA's high value accounts is another strong maneuver, allowing us to expand our customer base and capture a greater share of assets per household, while keeping acquisition costs low and improving profitability," said Mitchell Caplan, chief financial products officer and managing director, North America, of E*TRADE Group, Inc.
"Chase USA is selling these deposit accounts due to other funding sources it has developed in recent years to support its rapid growth," said Michael J. Barrett, president, Chase USA.
Other terms of the deal have not been disclosed. The transaction is subject to regulatory approvals.
