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ETR`s ann: ANZ Increases stake in E*TRADE Australia

Document date:  Tue 03 Oct 2000
Published:  Tue 03 Oct 2000 16:33:19
Document No:  219161
Document part:  A
Market Flag:  N
Classification:  Issued Capital - Other

ETRADE AUSTRALIA LIMITED                      2000-10-03  ASX-SIGNAL-G

HOMEX - Sydney                                                        

E*TRADE Australia (ASX: ETR,, a leading provider
of online financial services, today announced the issue of 7,381,926
shares to ANZ Bank (ASX: ANZ) increasing its holding to 19.8 per cent
of E*TRADE Australia's 67,597,441 shares on issue.

This issue of shares is made on the first anniversary of a three year
alliance approved by shareholders in August 1999. The agreement
provides E*TRADE Australia with access to ANZ's four million strong
customer base in Australia and New Zealand, while giving ANZ the
opportunity to be issued with up to 40 per cent equity in E*TRADE
Australia. ANZ's shareholding is in line with the contribution to
revenue made by ANZ introduced customers in the second six month
"milestone period" to the end of September.

The alliance with ANZ continues to be a success, with ANZ E*TRADE
customers accounting for almost 20 per cent of securities
transactions at E*TRADE over the six months ended 29 September 2000.
While the result is subject to audit, it is not anticipated any audit
adjustments will result in a decrease in equity earned by ANZ.

"We are pleased to increase ANZ's shareholding in E*TRADE Australia.
In just 12 months since our shareholders approved this alliance, our
customer numbers have grown more than 175 per cent from 23,500 to
over 65,000. ANZ have contributed over 17,000 customers in the 12
months since the alliance began. Clearly there is a strong incentive
for ANZ to maximise their contribution to our company in the
remaining two years whilst they earn equity in return for customers
and revenue," said Mr Malcolm Spry, Chairman, E*TRADE Australia.

Under the agreement ANZ are responsible for all marketing costs
incurred to encourage their customers to open accounts and trade
through E*TRADE. ANZ currently markets directly to their online
banking customers, staff, shareholders and all other general account
and card holders.

"Our innovative alliance with ANZ has achieved outstanding, success
in such a short period of time," added Mr Michael Deleray, Group
Chief Executive Officer, E*TRADE Australia. "Not only has the
alliance increased our customer accounts but it has also allowed us
to develop new online financial services, combining the strengths of
both companies to achieve exciting initiatives such as Real-time
Banking, where funds can be immediately transferred to E*TRADE in
order to place a trade."

Milestone shares issued to ANZ in the three year period ending 29
September 2002 are for non-cash consideration. E*TRADE Australia's
accounting policy is to expense the deemed value of these shares,
which is $2.254 per share approximating $16.6 million for the current
milestone issue, as an abnormal marketing expense. This non-cash
expense represents the deemed value of marketing services provided by
ANZ to E*TRADE Australia.

"The tremendous uptake of online banking among our customer base is
an indication of the future contribution we can make to E*TRADE's
success. We already have over 360,000 online banking customers and we
expect this growth to continue," said Mr Satyendra Chelvendra,
Managing Director, Personal e-Commerce, ANZ Bank.

At the end of the first quarter of this financial year, E*TRADE
Australia's account numbers are slightly ahead of target at 65,000.
E*TRADE's cash position is on budget with $21 million in cash

"As anticipated, the first two months' trading were on target,
however with the occurrence of the Olympics, September's daily
trading figures on the ASX and at E*TRADE were lower than
anticipated. Whilst our trades are up nearly 275 per cent on the
corresponding quarter last year, we have felt the effects of two
subsequent price cuts. Despite this, I am pleased to report our gross
brokerage this quarter is up more than 125 per cent on last year,"
said Mr Deleray.

For further information please contact:

Bill Wileman
Tel: +61 2 9432 5224

Louisa Murphy
Tel: +61 2 9362 8533