ANZ gets bigger slice of E*Trade
ANZ has doubled its stake in online stockbroker E*Trade to 19.8 per cent less than a month after the latter announced a net loss of close to $54 million for the financial year
ANZ has doubled its stake in online stockbroker E*Trade to 19.8 per cent less than a month after the latter announced a net loss of close to $54 million for the financial year.
At the time E*Trade reported an operating loss of around $12 million with the rest of the loss chalked up to the book value of the six million shares issued to ANZ.
E*Trade’s accounting policy is to expense the deemed value of these shares as an abnormal mar-keting expense and represents the deemed value of marketing services provided by ANZ to E*Trade.
The increase in stakeholding for ANZ also comes on the first anniversary of the three year alli-ance between the two groups, which was approved by shareholders in August 1999.
The new issue adds more than seven million shares to ANZ out of a total of 67.5 million shares available, adding to the six million shares it already held.
ANZ has the ability to increase its stake in E*Trade to 40 per cent through what is known as “milestone” issues of shares based on the number of customers it introduces to the online broker. These numbers are calculated in six month periods, with the second closing at the end of Sep-tember.
At the same time the agreement provides E*Trade with access to the bank’s four million custom-ers in Australia and New Zealand. E*Trade says this alliance is proving to be a success, with ANZ customers accounting for almost 20 per cent of securities transactions at E*Trade over the six months to September 29.
E*Trade group chief executive officer Michael Deleray says the alliance has increased customer accounts while also allowing the development of new online services such as real-time banking, where funds can be immediately transferred to E*TRADE in order to place a trade.
Under the agreement with E*Trade, ANZ is responsible for all marketing costs incurred to en-courage their customers to open accounts and trade through E*Trade.
In the 12 months since E*Trade shareholders approved the alliance, customer numbers had grown from 23,500 to more than 65,000, with ANZ contributing more than 17,000 of the final figure.
AUTHOR
Jason Spits
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