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E*TRADE Bank Nabs Ganis Credit

E*TRADE Group attempted to get some shopping done Tuesday when it moved to scoop up consumer finance business Ganis Credit Corporation, a U.S.-based subsidiary of Deutsche Bank AG, for $101 million.

The buy, should it reach fruition, would help E*TRADE Bank grow out its consumer lending business without compromising its credit quality. Ganis features a direct and indirect origination and servicing platform for recreational vehicle, marine and motorsport loans.

For the purchase price, Menlo Park, Calif.'s E*TRADE expects to receive the origination and servicing platform, as well as the premium paid on approximately $1.7 billion in consumer loans. Moreover, E*TRADE Bank will further diversify its revenue stream by assuming servicing for $3.5 billion in consumer loans. The transaction will be financed through the sale of a portion of E*TRADE Bank's mortgage portfolio.

E*TRADE Financial is looking to bolster its consumer finance wares by adding Ganis' recreational vehicle, marine and motorsport loans to its current suite, which includes mortgages, auto loans and home equity loans. The integration of Ganis' operating platform with E*TRADE Financial's technology will allow the company to provide real-time capabilities for direct consumer origination and servicing, indirect dealer origination and private-label affinity lending.

Arlen Gelbard, Chief Banking Officer and President, E*TRADE Bank, discussed the import of the acquisition in a press release.

"We are pleased that the loan portfolio acquired has been predominantly made to borrowers who are statistically similar to our existing consumer lending base, and who are most receptive to the types of high value products offered through E*TRADE Financial," said Gelbard. "By originating, funding and servicing recreational vehicle, marine and motorsport loans, we are creating another strong cross-selling opportunity to further deepen and expand our overall financial relationships with customer households."

E*TRADE Financial anticipates the transaction to close in the fourth quarter of 2002 or in early 2003.