E*Trade Financial Corporation has entered into an agreement with Capital One to acquire its online investment business for $170 million. The bank’s retail brokerage accounts handle over $18 billion in customer assets.
Capital One on Tuesday announced a fourth-quarter loss of $1.05 billion. The bank has shed other facets of its business in recent years, including mortgages and home-equity loans. In 2016, the company laid off 100 employees in Delaware after closing its mortgage operations in Wilmington. The bank also announced plans last April to consolidate its Delaware staff within two adjacent buildings downtown.
The News Journal reported today that employees of the Wilmington office have said there are widespread rumors of impending layoffs.
“The attractiveness of this acquisition is directly attributable to the power and flexibility of our business model,” said E*Trade CEO Karl Roessner in a statement. “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.”
For now, at least, Capital One customers shouldn’t expect any immediate changes.
“It’s business as usual for customers,” said Capital One spokesman Sie Soheili. “They can continue to actively manage their accounts with us as they always have.”
E*Trade expects the transaction to close in the third quarter of 2018.
Photo via Flickr user Frank Farm