E*Trade Group Inc.
said its E*Trade Mortgage unit continues to further its diversification strategy, and just passed the $4 billion in mortgage origination milestone.
The mortgage operation is a part of E*Trade’s banking subsidiary. The company said another $1 billion in locked loans is in the pipeline.
Menlo Park, Calif.-based E*Trade, which recently upped the ante on its wireless trading business by extending trading hours, entered the mortgage game last June in a move aimed both at broadening its revenue stream and capitalizing on its acquisition of LoansDirect last February.
The diversification move came as online trading in general declined rapidly as the bear market intimidated formerly bold do-it-yourself traders. And the mortgage business in general has done better as the housing market actually was one segment of the economy to benefit as interest rates dropped.
“This latest milestone of funding $4 billion in mortgage originations, within four months of reaching the $2 billion mark, demonstrates our momentum in generating both interest and non-interest income streams through our integrated financial services model,” said Mitchell Caplan, chief financial products officer and managing director/North America for E*Trade Group.
“… by originating, funding, and streamlining mortgage originations we develop and deepen our customer relationships resulting in enhanced profitability… ,” he said.
E*Trade has been struggling with profitability this year, after two years in which it made money. Revenues for the nine months ending Sept. 30 were down 4 percent to $1.55 billion. Net loss before extra. items totaled $278.5 million vs. a profit of $26.4 million in the same period a year earlier, according to Multex Investor data. The results reflect lower brokerage-related activities and a $227.2 million restructuring charge.
E*Trade stock was down 37 cents in mid-morning trading to $8.27. Its 52-week high is $15.37; the low $4.07.
E*Trade Finds Diversification Pays
E*Trade Group Inc.