How Has E-Trade’s Net Interest Income Changed In Recent Years?

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E*TRADE Financial

E-Trade earns a significant portion of its net revenues through net interest income, the difference between the interest it earns on its interest earning assets and the interest it pays on its interest earning liabilities.

Between 2013 to 2015, E-Trade’s revenue from its interest earning assets stagnated at around $1.2 billion, while the interest paid on liabilities decreased by as much as 46%. The decrease was mainly due to the termination of company’s legacy wholesale funding obligations in 2015. Consequently, the brokerage’s net interest income rose 12% over the period to $1.09 billion.

On the other hand, the company’s net interest revenue as a percentage of total revenue increased from 56% in 2013 to 76% in 2015, as the growth in net interest income outpaced E-Trade’s total revenue growth.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for E-Trade

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