E*Trade suffers huge losses
Online share broker E*Trade Australia has recorded a net loss of $53.8 million in the 12 months to the end of June, wider than the $3.9 million loss reported in the previous year.
Online share broker E*Trade Australia has recorded a net loss of $53.8 million in the 12 months to the end of June, wider than the $3.9 million loss reported in the previous year.
It said it reported a consolidated operating loss of $11.8 million with the rest of the loss chalked up to an abnormal non cash marketing expense of $42.18 million, representing the book value of the six million shares issued to ANZ under the alliance with the bank.
The negative result highlights a trend among online brokers in Australia, many that have strug-gled to translate their growth in market share to profits.
As a result of this negative figure E*Trade is likely to gain additional losses over the next two years as ANZ continues to channel online customers to the broker.
But despite the company’s negative year end result, E*Trade managing director, Michael Del-eray, still believes the alliance with ANZ has become a primary source of new customers for the group.
At the same time it was anticipated ANZ would be issued with new shares to increase its stakeholding in the company to 15-20 per cent.
E*Trade’s operating loss before tax and abnormals is down by more than 48 per cent on last year’s figure of $11.7 million, even though Deleray assured customers there had been a 224 per cent increase in customer account numbers to 62,000.
Deleray says the company would continue to diversify into activities apart from share trading as part of a push to win a greater share among customers.
The US parent recently began to mop up minority interests in the E*Trade operations outside the US and the Australian arm is now the only business that is not under its control.
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