E*Trade ups number of authorized shares

NEW YORK (Reuters) - E*Trade Financial Group Inc (ETFC.O: Quote, Profile, Research) shareholders on Friday voted to increase the number of authorized shares of common stock from 600 million to 1.2 billion, as the company seeks to improve its balance sheet following last year's hemorrhage of cash and accounts.

The company has no immediate plans to issue stock.

The online brokerage also told its annual shareholders meeting that its turnaround plan calls for it to reduce debt by $700 million by the end of 2008 and so far, it has reduced debt by $100 million.

Since last November, when customers fled the on-line brokerage after its holdings in risky mortgage securities generated big losses, the company has eliminated businesses such as its U.S. institutional sales business to focus on improving its balance sheet.

During that crisis, the company sold an 18 percent stake and $3 billion in asset-backed securities to hedge fund Citadel Investment Group for $2.6 billion in cash. E*Trade shares fell 84 percent in 2007.

So far this year, the company has shown signs of stabilizing. In April, the company brought in 18,000 new accounts, more than analysts were expecting, and saw daily average trading volume, a key indicator in the online brokerage industry, fall by less than those of its rivals. That news sent E*Trade shares up 5.5 percent on Wednesday.

E*Trade also told its shareholders that it would put any international expansion plans on hold. Currently the company offers U.S.-based customers the ability to invest in six overseas markets, but it said plans to expand that ability to other markets were "on hold" until its capital position improves.

E*Trade shares were trading at $4.32, down nearly 1 percent in early afternoon trading.

(Reporting by Phil Wahba, editing by Gerald E. McCormick)