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ETR: ANZ increases stake to 30.94%

Document date:  Wed 03 Oct 2001
Published:  Wed 03 Oct 2001 09:44:25
Document No:  245355
Document part:  A
Market Flag:  N
Classification:  Periodic Reports - Other , Issued Capital - Other , Appendix 3B

ETRADE AUSTRALIA LIMITED                      2001-10-03  ASX-SIGNAL-G

HOMEX - Sydney                                                        

E*TRADE Australia (ASX: ETR,, today announced the
issue of 5,204,799 shares to ANZ Bank (ASX: ANZ), taking ANZ's
holding from 26.07% to 30.94%.

This issue is made in accordance with the 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 earn up to 40
per cent equity, fully diluted in E*TRADE Australia. ANZ's
shareholding is in line with the contribution to revenue made by
ANZ-introduced customers in the fourth six-month "milestone period"
to the end of September 2001.

Under the alliance, ANZ is responsible for all marketing costs
incurred to encourage its customers to open accounts and trade
through E*TRADE. ANZ currently markets directly to its online
banking customers, staff, shareholders and all other general account
and cardholders.

Milestone shares issued to ANZ in the three-year period ending
September 29, 2002 are for non-cash consideration. E*TRADE
Australia's accounting policy is to write off the deemed value of
these shares, which is $0.56 per share for this issue, being
$2,914,688 for the current milestone issue, as a significant unusual
non-cash marketing expense. This non-cash expense represents the
deemed value of marketing services provided by ANZ to E*TRADE
Australia. The value of this share issue to the ANZ is calculated by
taking the average closing price for ETR shares on the ASX over the
20 trading days prior to the relevant milestone date.

"Again, we are pleased to be issuing additional milestone shares to
ANZ. This issue provides evidence of the continuing success of the
E*TRADE Australia - ANZ Alliance. Customers introduced by ANZ now
exceed 31,000 accounts (up over 160% since June 30, 2000),
representing more than one third of our customer base," said Michael
Deleray, Chief Executive Officer, E*TRADE Australia. "Our joint
technology initiative in implementing on-line real-time registration
for ANZ customers using ANZ online services has been a great

Commenting on the current financial year, Mr Deleray said, "In the
latter half of the 2001 financial year, significant cost reductions
were achieved. As a result, I am pleased to say we have achieved cash
positive operations for the first quarter of the 2002 financial year.
Operating cash reserves (unaudited), excluding funds held in trust,
at September 30, 2001 exceed $10.4 million, an increase of more than
$300,000 over the corresponding June 30, 2001 balance. Our customer
accounts are now approximately 90,000."

For more information:

Investors, Shareholders and Analysts: 

Please contact Mark Zworestine
(02) 9432 5224