The E*TRADE Bank unit of online stock brokerage firm E*TRADE Group Inc. signed a definitive agreement late in November to acquire Ganis Credit Corp., a major source of loans to consumers buying RVs, boats and motorsports products.
Ganis, a unit of Germany’s Deutsche Bank AG, makes loans directly to consumers and indirectly through the dealers selling RVs, boats and motorsports products.
E*TRADE Bank’s acquisition of Ganis is expected to be completed either late in 2002 or early 2003.
E*TRADE Bank was attracted by the high credit ratings of Ganis’ customers, according to Christos Cotsakos, chairman and CEO of E*TRADE Inc. The Ganis acquisition will immediately add value to E*TRADE Bank and allow it to solidify “our position in the consumer lending market while increasing return on equity at the bank and creating value for our shareholders and stakeholders,” Cotsakos added.
Ganis’ portfolio of RV, boat and motorsports products loans will be added to E*TRADE’s existing portfolio of mortgage, auto and home equity loans. Ganis’ “operating platform” will be combined with E*TRADE’s technology “to provide integrated, real-time capabilities for direct consumer origination and servicing, indirect dealer origination and private-label affinity lending.”
For Ganis, E*Trade will pay around $101 million, which will include Ganis’ “origination and servicing platform as well as the premium paid on approximately $1.7 billion in consumer loans.”
The sale of Ganis and Deutsche Financial Services (DFS) will mean that the German bank has severed its ties to the RV industry in the U.S.
Deutsche Bank announced in September that it intends to sell DFS, a major source of RV dealer floorplan financing, to the Vendor Financial Services division of the GE Commerical Finance subsidiary of General Electric Co. The sale of DFS was expected to be finalized before Dec. 31.
Deutsche Bank needs to raise cash because it has had to write-off bad loans and bad stock investments in companies such as bankrupt telecommunications industry giant WorldCom Inc.