E-Trade Agrees to Sell Consumer Finance Unit to GE for $60 Million

NEW YORK – E*TRADE FINANCIAL Corporation today announced it has entered into a definitive agreement to sell the origination and servicing business of E*TRADE Consumer Finance Corporation, the Company’s RV and marine lending business, to GE Consumer Finance’s Retail Sales Finance unit, for $60 million in cash. E*TRADE FINANCIAL expects to record a pre-tax gain of approximately $45 million upon closing.

Under the terms of the sale, $3.3 billion in RV and marine assets will remain the property of E*TRADE FINANCIAL and will continue to be serviced by E*TRADE Consumer Finance Corporation under GE Consumer Finance’s ownership. In addition, E*TRADE FINANCIAL will retain all assets originated through the transaction closing.

“We continuously review all aspects of the business to ensure all initiatives are core to the Company’s long-term vision,” said Mitchell H. Caplan, Chief Executive Officer, E*TRADE FINANCIAL Corporation. “We believe our customers and shareholders are best served by deploying capital in a manner that accelerates the realization of that vision.”

E*TRADE FINANCIAL also recently announced the acquisition of Harrisdirect and Kobren Insight Management. Both business moves were directed at ensuring all lines of business are aligned to rapidly achieve the Company’s long-term strategic goals.

“The sale of the consumer finance business allows us to further streamline our business and allows us greater focus in generating the value that is inherent in our business model,” said R. Jarrett Lilien, President and COO, E*TRADE FINANCIAL. “Maximizing opportunities for our retail customers to engage directly with us to meet their investing, cash and credit needs will yield the highest return for customers as well as shareholders.”

The deal is subject to approval by all regulatory agencies. Following the completion of the sale, GE Consumer Finance’s Retail Sales Finance division will re-brand E*TRADE Consumer Finance Corporation. Operations will continue to be based in Irvine, Calif. and Clearwater, Fla.

“Combining efforts with E*TRADE enables us to bring the best of both organizations to clients, customers and the industry,” said Glenn Marino, President and Chief Executive Officer of GE Consumer Finance’s Retail Sales Finance unit. “We look forward to maximizing the growth opportunities with this move.”