NEW YORK, Jan 25 (Reuters) - E*Trade Financial Corp will acquire 1 million retail brokerage accounts with around $18 billion of clients’ assets from Capital One Financial, it said on Thursday.
The discount brokerage will pay $170 million for the brokerage amounts. As of Dec. 31, clients held $1.9 billion in cash deposits in the portfolios.
“Our inherent scalability positions us to efficiently bring on these accounts and materially expand our U.S. household penetration,” E*Trade Chief Executive Karl Roessner said in a statement.
Capital One declined to comment and referred questions to E*Trade.
The acquisition, which will be funded with existing corporate cash, is expected to have a neutral impact on 2018 earnings, the statement said.
The discount brokerage also reported a 13 percent fall in fourth-quarter net income to $127 million, as the company recognized a $58 million tax expense due to the new U.S. tax law. (Reporting by Elizabeth Dilts; Editing by Susan Thomas)