NEW YORK, Nov 19 (Reuters) - E*Trade Financial Corp said on Tuesday that it has received approval from regulators to divert capital from its bank subsidiary to use for broader corporate purposes.
The approval, disclosed in a regulatory filing, is the second this year and signals progress in the discount brokerage company’s gradual recovery from its life-threatening issuance of faulty mortgages during the financial crisis. However, the amount being sent from the bank is lower than E*Trade had previously signaled.
The New York-based company said regulators and its board approved allowing E*Trade Bank to send its parent a dividend of $75 million this quarter. It also said that it intends to seek approval for continuing quarterly distributions from the bank “over the near term, up to the level of the bank’s net income from the prior quarter.”
E*Trade in September deployed $100 million of bank capital to its parent, saying at the time it hoped to continue distributing the same amount every quarter “over the near term.”
A bank spokesman did not immediately respond to a request to comment on the change in the dividend amount.
Shares of E*Trade were down 10 cents to $17.52 in early trading.