eTrade 2011 Annual Report Download - page 32

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the consolidated financial statements and the
related notes that appear elsewhere in this document.
GLOSSARY OF TERMS
In analyzing and discussing our business, we utilize certain metrics, ratios and other terms that are defined
in the Glossary of Terms, which is located at the end of Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations.
OVERVIEW
Strategy
Our core business is our trading and investing customer franchise. Building on the strengths of this
franchise, our growth strategy is focused on:
•Strengthening our overall financial and franchise position. We are focused on strengthening our
overall capital structure and continuing to mitigate credit losses in our loan portfolio. We are also
focused on positioning the Company for future growth and maintaining disciplined expense
management.
•Improving our market position in our retail brokerage business. We plan to grow our customer base by
continuing to increase our sales force, focus on long-term investing and develop innovative products
and services.
•Accelerating the growth of our corporate services and market making businesses. Our corporate
services and market making businesses enhance our strategy by allowing us to realize additional
economic benefit from our retail brokerage business.
•Enhancing our position with long-term investors. We believe growing our investing and retirement
products and services is key to our long term success. Our primary focus is to expand the reach of our
brand along with the awareness of our products to this key customer segment.
•Optimizing the value of our bank franchise. Our retail brokerage business generates a significant
amount of customer cash and we plan to continue to utilize our bank to optimize the value of these
customer deposits.
Key Factors Affecting Financial Performance
Our financial performance is affected by a number of factors outside of our control, including:
• customer demand for financial products and services;
• weakness or strength of the residential real estate and credit markets;
• performance, volume and volatility of the equity and capital markets;
• customer perception of the financial strength of our franchise;
• market demand and liquidity in the secondary market for mortgage loans and securities;
• market demand and liquidity in the wholesale borrowings market, including securities sold under
agreements to repurchase;
• our ability to obtain regulatory approval to move capital from our bank to our parent company; and
• changes to the rules and regulations governing the financial services industry.
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