E*Trade's Revenue Rises as Volume Picks Up After Brexit

E*Trade Financial Corp. said its second-quarter revenue rose 10% as trading picked up and its allowance for loan losses shrunk, though the pace of the online broker's new account openings slowed.

The results beat Wall Street expectations.

"The quarter closed in a frenzy of market activity that impelled a single-day record of net buying as customers seized opportunities following sharp market declines," Chief Executive Paul Idzik said, referring to the steep market selloff in the wake of the U.K.'s decision to exit the European Union on June 23.

E*Trade's daily average revenue trades increased 2% to 152,000 from a year earlier, but decreased 8% from the volatile first quarter.

Customers added $1.6 billion in net new brokerage assets during the period. The company ended the quarter with $286 billion in total customer assets, down from $302 billion a year earlier but up from $285 billion at the end of the prior quarter.

E*Trade ended the period with 3.3 million brokerage accounts, an increase of 23,000 from the prior quarter. But that growth slowed from a net 25,000 accounts added in the second quarter of 2015 and 45,000 accounts gained in the previous quarter.

In all, the company posted earnings of $133 million, or 48 cents a share, down from $292 million, or 99 cents a share, in a year-earlier period that included a $220 million tax benefit. Revenue rose to $474 million from $429 million.

Analysts polled by Thomson Reuters expected earnings of 38 cents a share on revenue of $471 million.

E*Trade said its allowance for loan losses was $293 million, down from $402 million in the second quarter of last year and $322 million in the previous quarter.

Rivals Charles Schwab Corp. and TD Ameritrade Corp. also reported stronger-than-expected results earlier this week, helped by the market volatility.

Write to Lauren Pollock at [e-mail]

(END) Dow Jones Newswires

July 21, 2016 16:25 ET (20:25 GMT)

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