eTrade 2012 Annual Report Download - page 35

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 strategy is focused on:
•Strengthening our overall financial and franchise position. We are focused on achieving a more
efficient distribution of capital between our regulated entities, improving capital ratios by reducing
risk, deleveraging the balance sheet and reducing costs, and enhancing our enterprise-wide risk
management culture and capabilities.
•Improving our market position in our retail brokerage business. We plan to accelerate the growth in
our customer franchise and to continue enhancing the customer experience.
•Capitalizing on the value of our complementary brokerage 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 in retirement and investing. We believe growing our retirement and investing
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.
•Continuing to manage and de-risk the Bank. We are focused on optimizing the value of customer
deposits, while continuing to mitigate credit losses in our loan portfolio, and improving the Bank’s risk
profile. In addition, we do not plan to offer new banking products to customers, including mortgages.
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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