E*Trade, one of the world's largest online stockbrokers, will establish an Internet data centre and technology base in the Republic to host its European operations.
Initially the centre will host the broker's existing retail Internet operations in Norway, Denmark, Sweden and Britain. But E*Trade's hosting requirements are likely to expand as the service is rolled out across Europe.
The Dublin centre will be developed on a similar basis to the company's two US regional operating centres in Sacramento, California and Atlanta, Georgia. It will involve a substantial multimillion dollar investment, although it is understood no figure has yet been finalised.
An IDA Ireland spokesman said yesterday negotiations were still ongoing and it was not yet clear whether Government assistance would be granted for the venture.
Mr Lesley Whyford, a spokesman for E*Trade in the Republic, confirmed the data centre project would be going ahead. "The decision has been made to establish a regional operating centre for Europe," he said. He said E*Trade would ultimately open an online brokerage in the Republic but the current licence held by the company only allowed it to handle financial transactions from private institutions.
E*Trade has already established a global centre for offering multi-currency securities execution and settlement in the Republic out of the IFSC. The company established this base by acquiring Tir Holdings in July 1999.
The company currently claims to serve 600-plus institutional clients worldwide and retail customers in Australia, Canada, Denmark, Japan, Korea, New Zealand, Norway, South Africa, Sweden, Britain and the US.
E*Trade reported revenues of $340 million (€392 million) for the fourth quarter to September 30th, 2000, up 76 per cent from the previous year.
Two months ago the company claimed three million active customer accounts and had a market capitalisation of $5 billion. However, the brokerage has not escaped the downturn in technology stocks. E*Trade's current share price of $9.50 has fallen from a 52-week high of $36 in January.
This week, analysts at Chase H&Q in San Francisco lowered fourth-quarter earnings estimates for E*Trade. They are concerned lower trading volumes will hit online brokerages.
