E*Trade buying Capital One brokerage business; local layoffs likely

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E*Trade Financial Corporation has entered into a definitive agreement to acquire more than one million retail brokerage accounts with$18 billionin customer assets from Capital One Financial Corporation for a purchase price of$170 million.

As ofDecember 31, 2017, these accounts carried$1.9 billionin customer cash, as well as$200 millionin customer margin balances.

A Capital One spokesperson issued the following statement:

After careful consideration, our Investing business announced that we’ve entered into a purchase agreement with E*TRADE Financial, which will acquire our self-directed online investing accounts.

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For now, it’s business as usual for customers. They can continue to actively manage their accounts with us as they always have, whether they prefer to do that online or by calling customer service.

There will be no immediate changes for our associates, they’ll continue to support the business through deal close. We anticipate that there will be job impacts and took the step of informing associates who could be impacted by this decision in order to provide them with proactive resources.

We’re fully committed to providing support and transition assistance to associates whose roles may ultimately be impacted. We’re working through specific details and will share more with our associates in the coming weeks.

Reports on cutbacks at the bank have been widespread recently, with a company representative earlier telling Delaware Business Now that Capital One does not respond to speculation.

Capital One is also consolidating its space to buildings on Delaware Avenue from other locations in downtown.

“The attractiveness of this acquisition is directly attributable to the power and flexibility of our business model,” saidKarl Roessner, E*Trade CEO. “Our inherent scalability positions us to efficiently bring on these accounts and materially expand our US household penetration. As the deal closes, we look forward to introducing these new customers to the depth, breadth, and best-in-class nature of our products and services, and to deepening our relationship with them.”

The transaction is expected to close during the third quarter of 2018, subject to customary closing conditions and regulatory approvals.

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