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Berkshire Global Advisors acted as financial advisor to Capital One Financial
  • has sold retail brokerage business to
  • Berkshire Global Advisors acted as financial advisor to Capital One Financial

  • Date: January 2018
  • Sector: Securities and Investment Banking
  • Sub-Sector: RIA
  • Region: North America
  • Seller AUM: $18 Billion
  • Seller Details
    Capital One Financial Corporation is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $243.7 billion in deposits and $365.7 billion in total assets as of December 31, 2017. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels.

    Buyer Details
    E*TRADE is a financial services company that provides brokerage and related products and services primarily to individual retail investors, traders, and stock plan participants. Founded on the principle of innovation, E*TRADE aims to enhance the financial independence of traders and investors through a digital offering and professional guidance—over the phone at two national branches and in-person at 30 E*TRADE branches across the United States. E*TRADE operates a bank with the primary purpose of maximizing the value of deposits generated through its brokerage business.

    Transaction Summary
    E*TRADE Financial Corporation has entered into a definitive agreement to acquire more than one million retail brokerage accounts with $18 billion in customer assets from Capital One Financial Corporation for a purchase price of $170 million. As of December 31, 2017 these accounts carried $1.9 billion in customer cash, as well as $0.2 billion in customer margin balances. E*TRADE expects the transaction to be relatively neutral to earnings in 2018 and approximately $0.06 accretive in 2019 when full run-rate synergies are expected.

    The transaction comes as E*TRADE continues to scale its existing platform and expand its penetration into US households. With this move, Capital One continues its strategy of exiting non-core business to refocus on its more profitable core banking and credit card operations. Capital One later announced the complete wind-down of its broker-dealer entity, Capital One Investing