(Reuters) - Discount brokerage E*Trade Financial Corp’s (ETFC.O) fourth-quarter 2014 profit fell 29.3 percent as it booked a pretax loss of $59 million on retiring corporate debt.
The company’s net income fell to $41 million, or 14 cents per share, for the three months ended Dec. 31, from $58 million, or 20 cents per share, a year earlier. The company earned $86 million in last year’s third quarter.
Total net revenue rose to $461 million from $446 million a year earlier.
The company, which almost went out of business during the financial crisis as a result of subprime loans its bank made during the financial crisis, also said it received regulatory approval to move its two broker-dealers - E*Trade Securities and E*Trade Clearing - from the bank.
They were put there in 2009 to give the bank capital strength. By moving them, E*Trade said it will be able to send much more of their excess cash to the parent company to use for reducing more debt, investing in new technology, growing its balance sheet and possibly buying back stock or paying dividends to stockholders.
In the first quarter, E*Trade Securities will be able to distribute about $430 million to the parent, executives said on a conference call with analysts. That is up from about $75 million per quarter that the brokerages have been sending to the parent - with each such dividend requiring approval from bank regulators.
Separately, Chief Executive Paul Idzik said on the call that Chief Marketing Officer Liza Landsman is leaving “to pursue other opportunities.”
She was one of the first senior executives Idzik hired after he joined the company in January 2013, and she presided over the decision to retire the noted “E*Trade Baby” ad campaign as Idzik focused the company on appealing to serious investors.
Idzik did not explain why Landsman, who previously ran digital marketing at BlackRock Inc (BLK.N), is leaving.
Reporting by Avik Das in Bengaluru; Editing by Simon Jennings