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.

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