E*TRADE Reports Break-Even Results From Ongoing Operations and $330 Million In Revenues

Company Reports Third Consecutive Quarter of Operating Profitability



Apr 10, 2001, 01:00 ET from E*TRADE Group, Inc.

    MENLO PARK, Calif., April 10 /PRNewswire/ --
 E*TRADE Group, Inc. (NYSE:   ET) today announced results for its quarter ended
 March 31, 2001, reporting net income from ongoing operations of $868,000, or
 $0.00 per share, compared to a net loss from ongoing operations of $672,000,
 or ($0.00) per share in the same quarter a year ago. The Company reported net
 revenue for its quarter ended March 31, 2001 of $330 million, down
 21 percent from $417 million for the same period a year ago.
     Results from ongoing operations exclude the amortization of goodwill and
 merger-related expenses, the gain (loss) on sale of investments, unrealized
 losses on the venture fund investments, and the fair value adjustments of
 financial derivatives related to the impact of the accounting rule FAS 133.
 Including all of the above mentioned items, E*TRADE reported a total loss
 before extraordinary loss on early extinguishment of debt for the quarter
 ended March 31, 2001 of $7.2 million, or ($0.02) per share on a fully diluted
 basis, compared to a net loss of $25.5 million, or ($0.09) per share for the
 same period a year ago.
     E*TRADE added 166,112 net new brokerage and banking accounts during the
 quarter ended March 31, 2001, bringing its total accounts to over 3.7 million,
 up 41 percent compared to the 2.6 million accounts reported at the end of the
 same quarter a year ago.
     "Despite the current economic slowdown, E*TRADE continued to demonstrate
 the strength and flexibility of our business model," said
 Christos M. Cotsakos, chairman of the board and chief executive officer of
 E*TRADE Group, Inc. "Our focus continues to be straight-forward -- manage the
 business for long-term growth, continue to meet the needs of our customers and
 build ongoing shareowner value. We're accomplishing this by leveraging cost
 efficiencies across the entire organization, increasing penetration of
 households by deepening customer relationships, offering innovative new
 products and capitalizing on new revenue streams."
     During the first quarter of calendar 2001, E*TRADE made significant
 advancements in operational efficiency and productivity while making important
 investments for future growth.  The Company focused on deepening its
 relationships with customer households by redirecting efforts to focus on
 cross-sell and up-sell opportunities between the brokerage and bank
 businesses, resulting in over $500 million in incremental deposits being added
 to existing bank customer accounts during the quarter.  Additionally, E*TRADE
 more efficiently grew its share of wallet by concentrating on high net worth
 individuals through Club E*TRADE.
     The Company extended its touch points with the grand opening of E*TRADE
 Center, its flagship financial superstore, in New York City.  E*TRADE Center's
 30,000 square feet of retail space brings knowledge and education to investors
 and savers in a high-tech/high-touch experience.  E*TRADE also enhanced its
 relationship with Target Corporation through agreements to add 1,000 ATMs in
 Target stores nationwide over the next two years and develop 20 new E*TRADE
 Zones in SuperTarget stores over the next 12 months.
     In the product arena, E*TRADE completed the acquisition of LoansDirect,
 which will allow consumers access to mortgage and home equity loans. The
 Company continued its personalized and segmented product strategy by
 introducing MarketTrader and Personal Money Management for active traders and
 high net worth individuals, respectively. E*TRADE also implemented a North
 American sales organization intended to establish a direct marketing channel
 within the mass affluent retail and corporate segments to deliver high value
 products and services.
     On the global front, E*TRADE established E*TRADE Hong Kong, making it the
 fourth country launched in the Asia-Pacific region -- following Australia,
 Japan and Korea -- and the eleventh country outside of the U.S. E*TRADE Hong
 Kong offers equities and warrants trading on the Hong Kong Stock Exchange and
 is one of the first financial services companies to offer flat fee pricing on
 equity trades to individual investors in Hong Kong.
     "Looking ahead to the next six to twelve months, E*TRADE plans to continue
 to invest in our efficient, scalable business model and broad product offering
 while aggressively looking for cost savings opportunities to ensure long-term
 earnings growth," continued Cotsakos. "Our seasoned management team will focus
 on core opportunities within the business, reallocate dollars to improve
 operational efficiency and continue to deliver products that meet consumer
 demand. In many ways, the current economic environment has been the ultimate
 test of our business model. If our business can deliver operating profits
 during a full market cycle, we expect it will perform to its ultimate
 potential during stronger market, economic and business conditions."
 
                               Financial Results
 
     Reconciliation of results from ongoing operations to reported results
 
                                       Q ended        Q ended        Q ended
                                       3/31/01        3/31/00        12/31/00
     Income (loss) as reported:
       Pre-tax                         ($20.4)         ($34.0)          $3.2
       After-tax, before cumulative
        effect of accounting change
        and extraordinary loss          ($7.2)         ($25.5)          $1.4
       EPS, before cumulative effect
        of accounting change and
        extraordinary loss             ($0.02)         ($0.09)         $0.00
 
     Pre-tax amounts, excluded
      from ongoing operations
     Amortization of goodwill
      and other intangibles             ($8.0)          ($5.3)         ($7.8)
     Merger related expenses               --          ($24.6)          (0.8)
 
     Gain /(loss) on sale of
      investments                       ($2.5)          $10.9           $3.6
     Unrealized loss on
      venture funds                    ($11.6)         ($14.6)         ($6.2)
     Fair value adjustments
      of financial derivatives           $0.3              --           $4.7
 
     Income (loss) from ongoing
       operations
     Pre-tax                             $1.4           ($0.4)          $9.7
     After-tax and minority interest     $0.9           ($0.7)          $6.0
     EPS                                $0.00          ($0.00)         $0.02
 
 
     Key Performance Metrics
 
                       Q ended     Q ended    Q ended   Q ended   Q ended
                       3/31/01     3/31/00    3/31/01  12/31/000  3/31/01
                                                vs.                 vs.
                                              Q ended             Q ended
                                              3/31/00             12/31/00
     Active investment
      accounts        3,320,356   2,474,001      34%   3,196,392       4%
     Active banking
      accounts          404,765     170,584     137%     362,617      12%
     Total active
      accounts end
      of period       3,725,121   2,644,585      41%   3,559,009       5%
 
     Net new accounts   166,112     610,681     (73%)    243,574     (32%)
     Cost per net
      new account          $387        $258      50%        $302      28%
 
     Total assets in
      investing
      accounts            $41.1       $62.7     (34%)      $46.9     (12%)
                        billion     billion              billion
     Total deposits
      in banking
      accounts             $6.8        $3.2     112%        $5.7      20%
                        billion     billion              billion
 
     Total assets/
      deposits in
      customer
      accounts           $47.9        $65.9     (27%)      $52.6      (9%)
                       billion      billion              billion
 
     Total inflow
      into customer
      accounts            $5.3        $10.0     (47%)       $5.6      (5%)
                       billion      billion              billion
     Daily average
      inflow               $85         $159     (46%)        $89      (5%)
                       million      million              million
 
     Total bank
      assets             $12.1         $6.4      88%       $11.3       7%
                       billion      billion              billion
     Total
      transactions         8.4         14.6     (42%)        9.4     (11%)
                       million      million              million
     Daily average
      transactions     136,000      232,000     (42%)    150,000      (9%)
 
     About E*TRADE
     E*TRADE is a global leader in online personal financial services, offering
 value-added investing, banking and research features, premium customer service
 and a redundant, proprietary Stateless Architecture(R) infrastructure. In
 addition to the U.S., E*TRADE presently serves customers in Australia, Canada,
 Denmark, Hong Kong, Korea, Japan, New Zealand, Norway, South Africa, Sweden,
 and the U.K. through branded web sites. E*TRADE Securities Inc. (Member
 NASD/SIPC), and its parent company, E*TRADE Group, Inc., have offices in
 Northern California and in other major business centers in the
 U.S. and worldwide. E*TRADE is a registered trademark of E*TRADE Securities,
 Inc. E*TRADE Bank is a wholly owned subsidiary of E*TRADE Group, Inc.
 
     Important Notice
     E*TRADE, Destination E*TRADE and Stateless Architecture are registered
 trademarks or trademarks of E*TRADE Securities, Inc.  All other trademarks are
 properties of their respective owners.  The statements contained in this news
 release that are forward-looking are based on current expectations that are
 subject to a number of uncertainties and risks, and actual results may differ
 materially.  The uncertainties and risks include, but are not limited to,
 changes in market activity, market acceptance of the Destination E*TRADE web
 site, anticipated increases in the rate of new customer acquisition, the
 conversion of new visitors to the site to customers, seasonality, the
 development of new products and services, the enhancement of existing products
 and services, competitive pressures (including price competition), system
 failures, economic and political conditions, changes in consumer behavior and
 the introduction of competing products having technological and/or other
 advantages.  Further information about these risks and uncertainties can be
 found in the information included in the annual report filed by the company
 with the SEC on Form 10-K in November 2000, as amended (including information
 under the caption "Risk Factors").
 
     System response and account access time may vary due to market conditions,
 trading volume, system performance and other factors.
     E*TRADE Bank and E*TRADE Securities, Inc. are affiliated but separate
 companies. Deposits at E*TRADE Bank are insured up to $100,000 by the Federal
 Deposit Insurance Corporation (FDIC). Investment products made available from
 E*TRADE Securities, Inc. are not insured by the FDIC, are not guaranteed
 deposits or obligations of E*TRADE Bank and are subject to investment risk,
 including possible loss of principal amount invested.
 
     E * T R A D E   G R O U P ,  I N C .   A N D   S U B S I D I A R I E S
   C o n s o l i d a t e d   S t a t e m e n t s   o f   O p e r a t i o n s
                    (in thousands, except per share amounts)
                                  (Unaudited)
 
                                                        Three Months Ended
                                                            March 31,
                                                       2001           2000
     Revenues:
         Transaction revenues                        $131,362       $254,596
         Interest income                              317,430        243,582
         Global and institutional                      36,841         49,676
         Other                                         64,492         16,711
             Gross revenues                           550,125        564,565
         Interest expense                            (219,101)      (146,609)
         Provision for loan losses                     (1,443)        (1,256)
             Net revenues                             329,581        416,700
 
     Cost of services                                 142,435        135,579
 
     Operating expenses:
         Selling and marketing                         93,698        180,605
         Technology development                        22,281         43,335
         General and administrative                    60,242         52,551
         Amortization of goodwill
          and other intangibles                         7,999          5,297
         Merger related expenses                           --         24,599
             Total operating expenses                 184,220        306,387
             Total cost of services
              and operating expenses                  326,655        441,966
 
     Operating income (loss)                            2,926        (25,266)
 
     Non-operating income (expense):
         Corporate interest income                      5,778          3,620
         Corporate interest expense                   (11,228)        (7,128)
         Gain (loss) on sale of investments            (2,531)        10,915
         Equity in losses of investments               (3,341)          (736)
         Unrealized loss on venture funds             (11,611)       (14,628)
         Fair value adjustments
          of financial derivatives                        334            --
         Other                                           (700)          (753)
             Total non-operating expense              (23,299)        (8,710)
 
     Pre-tax loss                                     (20,373)       (33,976)
     Income tax benefit                               (13,242)        (8,918)
     Minority interest in subsidiaries                     35            408
     Loss before extraordinary
      loss on early extinguishment of debt             (7,166)       (25,466)
     Extraordinary loss on early
      extinguishment of debt, net of tax               (2,037)           --
     Net loss                                         $(9,203)      $(25,466)
 
     Loss per share before extraordinary
       loss on early extinguishment of debt
             Basic                                    $(0.02)         $(0.09)
             Diluted                                  $(0.02)         $(0.09)
 
     Net loss per share:
             Basic                                    $(0.03)         $(0.09)
             Diluted                                  $(0.03)         $(0.09)
 
     Shares used in computation of per share data:
             Basic                                   317,242         298,026
             Diluted                                 317,242         298,026
 
 
     E * T R A D E   G R O U P ,  I N C .   A N D   S U B S I D I A R I E S
   C o n s o l i d a t e d   S t a t e m e n t s   o f   O p e r a t i o n s
                    (in thousands, except per share amounts)
                                  (Unaudited)
 
                                                        Three Months Ended
                                                    March 31,     December 31,
                                                       2001           2000
     Revenues:
         Transaction revenues                        $131,362       $153,405
         Interest income                              317,430        337,890
         Global and institutional                      36,841         37,454
         Other                                         64,492         40,283
             Gross revenues                           550,125        569,032
         Interest expense                            (219,101)      (233,619)
         Provision for loan losses                     (1,443)        (1,647)
             Net revenues                             329,581        333,766
 
     Cost of services                                 142,435        133,260
 
     Operating expenses:
         Selling and marketing                         93,698         97,940
         Technology development                        22,281         29,161
         General and administrative                    60,242         57,901
         Amortization of goodwill
          and other intangibles                         7,999          7,811
         Merger related expenses                           --            784
             Total operating expenses                 184,220        193,597
             Total cost of services
              and operating expenses                  326,655        326,857
 
     Operating income                                   2,926          6,909
 
     Non-operating income (expense):
         Corporate interest income                      5,778          7,061
         Corporate interest expense                   (11,228)       (11,211)
         Gain (loss) on sale of investments            (2,531)         3,582
         Equity in losses of investments               (3,341)           (61)
         Unrealized loss on venture funds             (11,611)        (6,158)
         Fair value adjustments
          of financial derivatives                        334          4,668
         Other                                           (700)        (1,561)
             Total non-operating expense              (23,299)        (3,680)
 
     Pre-tax income (loss)                            (20,373)         3,229
     Income tax expense (benefit)                     (13,242)         1,905
     Minority interest in subsidiaries                     35           (112)
     Income (loss) before cumulative effect
      of accounting change and extraordinary loss      (7,166)         1,436
     Cumulative effect of
      accounting change, net of tax                        --            (83)
     Extraordinary loss on early
      extinguishment of debt, net of tax               (2,037)            --
 
     Net income (loss)                                $(9,203)        $1,353
 
     Income (loss) per share before
      cumulative effect of accounting
      change and extraordinary loss:
             Basic                                     $(0.02)         $0.00
             Diluted                                   $(0.02)         $0.00
 
     Net income (loss) per share:
             Basic                                     $(0.03)         $0.00
             Diluted                                   $(0.03)         $0.00
 
     Shares used in computation of per share data:
             Basic                                    317,242        311,413
             Diluted                                  317,242        321,430
 
 
    E * T R A D E   G R O U P ,   I N C .   A N D   S U B S I D I A R I E S
             C o n s o l i d a t e d   B a l a n c e   S h e e t s
                                 (in thousands)
                                  (Unaudited)
 
                                                    March 31,     December 31,
                                                       2001           2000
 
     ASSETS
     Cash and equivalents                            $158,978       $212,430
     Cash and investments required to be
      segregated under Federal or other regulations   131,484        122,327
     Brokerage receivables - net                    4,562,003      4,639,078
     Mortgage-backed securities                     3,970,223      5,058,919
     Loans receivable - net                         6,345,377      5,039,602
     Investments                                    1,722,330      1,350,797
     Property and equipment - net                     425,587        368,355
     Goodwill and other intangibles                   456,813        441,984
     Other assets                                     642,740        507,618
         Total assets                             $18,415,535    $17,741,110
 
     LIABILITIES AND SHAREOWNERS' EQUITY
     Liabilities:
         Brokerage payables                        $4,273,285     $4,226,124
         Banking deposits                           6,862,630      5,750,209
         Borrowings by bank subsidiary              4,033,426      4,629,353
         Accounts payable, accrued
          and other liabilities                       842,339        708,629
         Convertible subordinated notes               650,000        650,000
             Total liabilities                     16,661,680     15,964,315
 
     Mandatorily redeemable preferred securities       30,763         30,747
 
     Shareowners' equity:
         Preferred stock, shares
          authorized: 1,000,000;
          issued and outstanding:
          none at March 31, 2001
          and December 31, 2000                            --             --
         Shares exchangeable into
          common stock, $.01 par value,
          shares authorized:
          10,644,223; issued and outstanding:
          3,293,840 at March 31, 2001
          and 4,101,504 at December 31, 2000               33             41
         Common stock, $.01 par value,
          shares authorized: 600,000,000;
          issued and outstanding:
          318,908,996 at March 31, 2001 and
          308,220,126 at December 31, 2000              3,189          3,082
         Additional paid-in-capital                 1,907,837      1,827,444
         Unearned ESOP shares                          (1,286)        (1,422)
         Shareowners' notes receivable                (19,640)       (19,640)
         Deferred compensation                        (13,088)            --
         Accumulated deficit                          (14,758)        (5,555)
         Accumulated other comprehensive loss        (139,195)       (57,902)
             Total shareowners' equity              1,723,092      1,746,048
             Total liabilities
             and shareowners' equity              $18,415,535    $17,741,110
 
     CONTACT:  media, Heather Fondo, 415-932-6172, hfondo@etrade.com, or
 investors, Erica Gessert, 650-331-5893, or egessert@etrade.com, both of
 E*TRADE Group, Inc.
 
 

SOURCE E*TRADE Group, Inc.
    MENLO PARK, Calif., April 10 /PRNewswire/ --
 E*TRADE Group, Inc. (NYSE:   ET) today announced results for its quarter ended
 March 31, 2001, reporting net income from ongoing operations of $868,000, or
 $0.00 per share, compared to a net loss from ongoing operations of $672,000,
 or ($0.00) per share in the same quarter a year ago. The Company reported net
 revenue for its quarter ended March 31, 2001 of $330 million, down
 21 percent from $417 million for the same period a year ago.
     Results from ongoing operations exclude the amortization of goodwill and
 merger-related expenses, the gain (loss) on sale of investments, unrealized
 losses on the venture fund investments, and the fair value adjustments of
 financial derivatives related to the impact of the accounting rule FAS 133.
 Including all of the above mentioned items, E*TRADE reported a total loss
 before extraordinary loss on early extinguishment of debt for the quarter
 ended March 31, 2001 of $7.2 million, or ($0.02) per share on a fully diluted
 basis, compared to a net loss of $25.5 million, or ($0.09) per share for the
 same period a year ago.
     E*TRADE added 166,112 net new brokerage and banking accounts during the
 quarter ended March 31, 2001, bringing its total accounts to over 3.7 million,
 up 41 percent compared to the 2.6 million accounts reported at the end of the
 same quarter a year ago.
     "Despite the current economic slowdown, E*TRADE continued to demonstrate
 the strength and flexibility of our business model," said
 Christos M. Cotsakos, chairman of the board and chief executive officer of
 E*TRADE Group, Inc. "Our focus continues to be straight-forward -- manage the
 business for long-term growth, continue to meet the needs of our customers and
 build ongoing shareowner value. We're accomplishing this by leveraging cost
 efficiencies across the entire organization, increasing penetration of
 households by deepening customer relationships, offering innovative new
 products and capitalizing on new revenue streams."
     During the first quarter of calendar 2001, E*TRADE made significant
 advancements in operational efficiency and productivity while making important
 investments for future growth.  The Company focused on deepening its
 relationships with customer households by redirecting efforts to focus on
 cross-sell and up-sell opportunities between the brokerage and bank
 businesses, resulting in over $500 million in incremental deposits being added
 to existing bank customer accounts during the quarter.  Additionally, E*TRADE
 more efficiently grew its share of wallet by concentrating on high net worth
 individuals through Club E*TRADE.
     The Company extended its touch points with the grand opening of E*TRADE
 Center, its flagship financial superstore, in New York City.  E*TRADE Center's
 30,000 square feet of retail space brings knowledge and education to investors
 and savers in a high-tech/high-touch experience.  E*TRADE also enhanced its
 relationship with Target Corporation through agreements to add 1,000 ATMs in
 Target stores nationwide over the next two years and develop 20 new E*TRADE
 Zones in SuperTarget stores over the next 12 months.
     In the product arena, E*TRADE completed the acquisition of LoansDirect,
 which will allow consumers access to mortgage and home equity loans. The
 Company continued its personalized and segmented product strategy by
 introducing MarketTrader and Personal Money Management for active traders and
 high net worth individuals, respectively. E*TRADE also implemented a North
 American sales organization intended to establish a direct marketing channel
 within the mass affluent retail and corporate segments to deliver high value
 products and services.
     On the global front, E*TRADE established E*TRADE Hong Kong, making it the
 fourth country launched in the Asia-Pacific region -- following Australia,
 Japan and Korea -- and the eleventh country outside of the U.S. E*TRADE Hong
 Kong offers equities and warrants trading on the Hong Kong Stock Exchange and
 is one of the first financial services companies to offer flat fee pricing on
 equity trades to individual investors in Hong Kong.
     "Looking ahead to the next six to twelve months, E*TRADE plans to continue
 to invest in our efficient, scalable business model and broad product offering
 while aggressively looking for cost savings opportunities to ensure long-term
 earnings growth," continued Cotsakos. "Our seasoned management team will focus
 on core opportunities within the business, reallocate dollars to improve
 operational efficiency and continue to deliver products that meet consumer
 demand. In many ways, the current economic environment has been the ultimate
 test of our business model. If our business can deliver operating profits
 during a full market cycle, we expect it will perform to its ultimate
 potential during stronger market, economic and business conditions."
 
                               Financial Results
 
     Reconciliation of results from ongoing operations to reported results
 
                                       Q ended        Q ended        Q ended
                                       3/31/01        3/31/00        12/31/00
     Income (loss) as reported:
       Pre-tax                         ($20.4)         ($34.0)          $3.2
       After-tax, before cumulative
        effect of accounting change
        and extraordinary loss          ($7.2)         ($25.5)          $1.4
       EPS, before cumulative effect
        of accounting change and
        extraordinary loss             ($0.02)         ($0.09)         $0.00
 
     Pre-tax amounts, excluded
      from ongoing operations
     Amortization of goodwill
      and other intangibles             ($8.0)          ($5.3)         ($7.8)
     Merger related expenses               --          ($24.6)          (0.8)
 
     Gain /(loss) on sale of
      investments                       ($2.5)          $10.9           $3.6
     Unrealized loss on
      venture funds                    ($11.6)         ($14.6)         ($6.2)
     Fair value adjustments
      of financial derivatives           $0.3              --           $4.7
 
     Income (loss) from ongoing
       operations
     Pre-tax                             $1.4           ($0.4)          $9.7
     After-tax and minority interest     $0.9           ($0.7)          $6.0
     EPS                                $0.00          ($0.00)         $0.02
 
 
     Key Performance Metrics
 
                       Q ended     Q ended    Q ended   Q ended   Q ended
                       3/31/01     3/31/00    3/31/01  12/31/000  3/31/01
                                                vs.                 vs.
                                              Q ended             Q ended
                                              3/31/00             12/31/00
     Active investment
      accounts        3,320,356   2,474,001      34%   3,196,392       4%
     Active banking
      accounts          404,765     170,584     137%     362,617      12%
     Total active
      accounts end
      of period       3,725,121   2,644,585      41%   3,559,009       5%
 
     Net new accounts   166,112     610,681     (73%)    243,574     (32%)
     Cost per net
      new account          $387        $258      50%        $302      28%
 
     Total assets in
      investing
      accounts            $41.1       $62.7     (34%)      $46.9     (12%)
                        billion     billion              billion
     Total deposits
      in banking
      accounts             $6.8        $3.2     112%        $5.7      20%
                        billion     billion              billion
 
     Total assets/
      deposits in
      customer
      accounts           $47.9        $65.9     (27%)      $52.6      (9%)
                       billion      billion              billion
 
     Total inflow
      into customer
      accounts            $5.3        $10.0     (47%)       $5.6      (5%)
                       billion      billion              billion
     Daily average
      inflow               $85         $159     (46%)        $89      (5%)
                       million      million              million
 
     Total bank
      assets             $12.1         $6.4      88%       $11.3       7%
                       billion      billion              billion
     Total
      transactions         8.4         14.6     (42%)        9.4     (11%)
                       million      million              million
     Daily average
      transactions     136,000      232,000     (42%)    150,000      (9%)
 
     About E*TRADE
     E*TRADE is a global leader in online personal financial services, offering
 value-added investing, banking and research features, premium customer service
 and a redundant, proprietary Stateless Architecture(R) infrastructure. In
 addition to the U.S., E*TRADE presently serves customers in Australia, Canada,
 Denmark, Hong Kong, Korea, Japan, New Zealand, Norway, South Africa, Sweden,
 and the U.K. through branded web sites. E*TRADE Securities Inc. (Member
 NASD/SIPC), and its parent company, E*TRADE Group, Inc., have offices in
 Northern California and in other major business centers in the
 U.S. and worldwide. E*TRADE is a registered trademark of E*TRADE Securities,
 Inc. E*TRADE Bank is a wholly owned subsidiary of E*TRADE Group, Inc.
 
     Important Notice
     E*TRADE, Destination E*TRADE and Stateless Architecture are registered
 trademarks or trademarks of E*TRADE Securities, Inc.  All other trademarks are
 properties of their respective owners.  The statements contained in this news
 release that are forward-looking are based on current expectations that are
 subject to a number of uncertainties and risks, and actual results may differ
 materially.  The uncertainties and risks include, but are not limited to,
 changes in market activity, market acceptance of the Destination E*TRADE web
 site, anticipated increases in the rate of new customer acquisition, the
 conversion of new visitors to the site to customers, seasonality, the
 development of new products and services, the enhancement of existing products
 and services, competitive pressures (including price competition), system
 failures, economic and political conditions, changes in consumer behavior and
 the introduction of competing products having technological and/or other
 advantages.  Further information about these risks and uncertainties can be
 found in the information included in the annual report filed by the company
 with the SEC on Form 10-K in November 2000, as amended (including information
 under the caption "Risk Factors").
 
     System response and account access time may vary due to market conditions,
 trading volume, system performance and other factors.
     E*TRADE Bank and E*TRADE Securities, Inc. are affiliated but separate
 companies. Deposits at E*TRADE Bank are insured up to $100,000 by the Federal
 Deposit Insurance Corporation (FDIC). Investment products made available from
 E*TRADE Securities, Inc. are not insured by the FDIC, are not guaranteed
 deposits or obligations of E*TRADE Bank and are subject to investment risk,
 including possible loss of principal amount invested.
 
     E * T R A D E   G R O U P ,  I N C .   A N D   S U B S I D I A R I E S
   C o n s o l i d a t e d   S t a t e m e n t s   o f   O p e r a t i o n s
                    (in thousands, except per share amounts)
                                  (Unaudited)
 
                                                        Three Months Ended
                                                            March 31,
                                                       2001           2000
     Revenues:
         Transaction revenues                        $131,362       $254,596
         Interest income                              317,430        243,582
         Global and institutional                      36,841         49,676
         Other                                         64,492         16,711
             Gross revenues                           550,125        564,565
         Interest expense                            (219,101)      (146,609)
         Provision for loan losses                     (1,443)        (1,256)
             Net revenues                             329,581        416,700
 
     Cost of services                                 142,435        135,579
 
     Operating expenses:
         Selling and marketing                         93,698        180,605
         Technology development                        22,281         43,335
         General and administrative                    60,242         52,551
         Amortization of goodwill
          and other intangibles                         7,999          5,297
         Merger related expenses                           --         24,599
             Total operating expenses                 184,220        306,387
             Total cost of services
              and operating expenses                  326,655        441,966
 
     Operating income (loss)                            2,926        (25,266)
 
     Non-operating income (expense):
         Corporate interest income                      5,778          3,620
         Corporate interest expense                   (11,228)        (7,128)
         Gain (loss) on sale of investments            (2,531)        10,915
         Equity in losses of investments               (3,341)          (736)
         Unrealized loss on venture funds             (11,611)       (14,628)
         Fair value adjustments
          of financial derivatives                        334            --
         Other                                           (700)          (753)
             Total non-operating expense              (23,299)        (8,710)
 
     Pre-tax loss                                     (20,373)       (33,976)
     Income tax benefit                               (13,242)        (8,918)
     Minority interest in subsidiaries                     35            408
     Loss before extraordinary
      loss on early extinguishment of debt             (7,166)       (25,466)
     Extraordinary loss on early
      extinguishment of debt, net of tax               (2,037)           --
     Net loss                                         $(9,203)      $(25,466)
 
     Loss per share before extraordinary
       loss on early extinguishment of debt
             Basic                                    $(0.02)         $(0.09)
             Diluted                                  $(0.02)         $(0.09)
 
     Net loss per share:
             Basic                                    $(0.03)         $(0.09)
             Diluted                                  $(0.03)         $(0.09)
 
     Shares used in computation of per share data:
             Basic                                   317,242         298,026
             Diluted                                 317,242         298,026
 
 
     E * T R A D E   G R O U P ,  I N C .   A N D   S U B S I D I A R I E S
   C o n s o l i d a t e d   S t a t e m e n t s   o f   O p e r a t i o n s
                    (in thousands, except per share amounts)
                                  (Unaudited)
 
                                                        Three Months Ended
                                                    March 31,     December 31,
                                                       2001           2000
     Revenues:
         Transaction revenues                        $131,362       $153,405
         Interest income                              317,430        337,890
         Global and institutional                      36,841         37,454
         Other                                         64,492         40,283
             Gross revenues                           550,125        569,032
         Interest expense                            (219,101)      (233,619)
         Provision for loan losses                     (1,443)        (1,647)
             Net revenues                             329,581        333,766
 
     Cost of services                                 142,435        133,260
 
     Operating expenses:
         Selling and marketing                         93,698         97,940
         Technology development                        22,281         29,161
         General and administrative                    60,242         57,901
         Amortization of goodwill
          and other intangibles                         7,999          7,811
         Merger related expenses                           --            784
             Total operating expenses                 184,220        193,597
             Total cost of services
              and operating expenses                  326,655        326,857
 
     Operating income                                   2,926          6,909
 
     Non-operating income (expense):
         Corporate interest income                      5,778          7,061
         Corporate interest expense                   (11,228)       (11,211)
         Gain (loss) on sale of investments            (2,531)         3,582
         Equity in losses of investments               (3,341)           (61)
         Unrealized loss on venture funds             (11,611)        (6,158)
         Fair value adjustments
          of financial derivatives                        334          4,668
         Other                                           (700)        (1,561)
             Total non-operating expense              (23,299)        (3,680)
 
     Pre-tax income (loss)                            (20,373)         3,229
     Income tax expense (benefit)                     (13,242)         1,905
     Minority interest in subsidiaries                     35           (112)
     Income (loss) before cumulative effect
      of accounting change and extraordinary loss      (7,166)         1,436
     Cumulative effect of
      accounting change, net of tax                        --            (83)
     Extraordinary loss on early
      extinguishment of debt, net of tax               (2,037)            --
 
     Net income (loss)                                $(9,203)        $1,353
 
     Income (loss) per share before
      cumulative effect of accounting
      change and extraordinary loss:
             Basic                                     $(0.02)         $0.00
             Diluted                                   $(0.02)         $0.00
 
     Net income (loss) per share:
             Basic                                     $(0.03)         $0.00
             Diluted                                   $(0.03)         $0.00
 
     Shares used in computation of per share data:
             Basic                                    317,242        311,413
             Diluted                                  317,242        321,430
 
 
    E * T R A D E   G R O U P ,   I N C .   A N D   S U B S I D I A R I E S
             C o n s o l i d a t e d   B a l a n c e   S h e e t s
                                 (in thousands)
                                  (Unaudited)
 
                                                    March 31,     December 31,
                                                       2001           2000
 
     ASSETS
     Cash and equivalents                            $158,978       $212,430
     Cash and investments required to be
      segregated under Federal or other regulations   131,484        122,327
     Brokerage receivables - net                    4,562,003      4,639,078
     Mortgage-backed securities                     3,970,223      5,058,919
     Loans receivable - net                         6,345,377      5,039,602
     Investments                                    1,722,330      1,350,797
     Property and equipment - net                     425,587        368,355
     Goodwill and other intangibles                   456,813        441,984
     Other assets                                     642,740        507,618
         Total assets                             $18,415,535    $17,741,110
 
     LIABILITIES AND SHAREOWNERS' EQUITY
     Liabilities:
         Brokerage payables                        $4,273,285     $4,226,124
         Banking deposits                           6,862,630      5,750,209
         Borrowings by bank subsidiary              4,033,426      4,629,353
         Accounts payable, accrued
          and other liabilities                       842,339        708,629
         Convertible subordinated notes               650,000        650,000
             Total liabilities                     16,661,680     15,964,315
 
     Mandatorily redeemable preferred securities       30,763         30,747
 
     Shareowners' equity:
         Preferred stock, shares
          authorized: 1,000,000;
          issued and outstanding:
          none at March 31, 2001
          and December 31, 2000                            --             --
         Shares exchangeable into
          common stock, $.01 par value,
          shares authorized:
          10,644,223; issued and outstanding:
          3,293,840 at March 31, 2001
          and 4,101,504 at December 31, 2000               33             41
         Common stock, $.01 par value,
          shares authorized: 600,000,000;
          issued and outstanding:
          318,908,996 at March 31, 2001 and
          308,220,126 at December 31, 2000              3,189          3,082
         Additional paid-in-capital                 1,907,837      1,827,444
         Unearned ESOP shares                          (1,286)        (1,422)
         Shareowners' notes receivable                (19,640)       (19,640)
         Deferred compensation                        (13,088)            --
         Accumulated deficit                          (14,758)        (5,555)
         Accumulated other comprehensive loss        (139,195)       (57,902)
             Total shareowners' equity              1,723,092      1,746,048
             Total liabilities
             and shareowners' equity              $18,415,535    $17,741,110
 
     CONTACT:  media, Heather Fondo, 415-932-6172, hfondo@etrade.com, or
 investors, Erica Gessert, 650-331-5893, or egessert@etrade.com, both of
 E*TRADE Group, Inc.
 
 SOURCE  E*TRADE Group, Inc.