STRATEGIC PARTNERS
March 5, 2002
MENLO PARK, Calif. -- E*TRADE Group, Inc. (Nasdaq: EGRP), the online financial services company that earlier this year purchased Card Capture Services, exceeded $1 billion in revenues in the first nine months of its fiscal year 2000 and reached nearly 3 million accounts, achieving break-even results from ongoing operations for the second consecutive quarter.
For the third quarter ended June 30, net revenue was $330.3 million, up 77 percent from $186.4 million for the same period a year ago. E*TRADE had a net profit from ongoing operations of $500,000, or O cents per share, as compared to a net loss of $21.4 million, or eight cents per share a year earlier.
The reported total net profit for the third quarter of fiscal 2000 was $5.7 million, or 2 cents per share, as the company continued its plan to periodically liquidate portions of its strategic investment portfolio. Results from ongoing operations exclude the amortization of goodwill and merger-related expenses, the gain on sale of investments and an unrealized loss on the venture fund.
E*TRADE also added 330,000 net new brokerage and banking accounts during the third quarter, bringing its total active accounts to nearly 3 million, a growth of 125 percent from a base of 1.3 million accounts a year ago. E*TRADE maintained a cost per net new account of $286. Average transactions per day were 169,000, up 109 percent from 80,600 a year ago.
The company officially launched E*TRADE Bank, just three months after closing its acquisition of Telebanc. E*TRADE Bank added 52,000 net new accounts during the quarter, and $800 million in deposits. Total deposits held in customer accounts were $3.9 billion, up 141 percent from $1.6 billion a year ago, and up 23 percent from the fiscal second quarter. Income from E*TRADE Bank represented 53 percent of total interest income, and 29 percent of gross revenues.
"We are only just beginning to realize the tremendous opportunities to expand this business," said Christos M. Cotsakos, chairman of the board and CEO of E*TRADE Group, Inc. "E*TRADE Bank is a cornerstone of our revenue diversification and global growth strategy. We are creating a powerful, personalized online hub that we believe will drive a new revolution in financial services worldwide."
The company recently announced a pilot agreement with Target to build E*TRADE Zones, featuring ATMs with deposit-taking capabilities, in Super Target Stores. The first is scheduled to be launched at the Target SuperStore in Roswell, Ga., by the end of the year.
E*TRADE also announced that it will soon begin installing E*TRADE Bank ATMs at Oracle's major facilities to provide a range of banking and financial services to the company's employees. Based on the 3,500 corporate customers served by E*TRADE's Business Solutions Group, the company estimates that as many as 1 million employees of those companies are potential customers for its new corporate banking services.
