U.S. online brokerage E*Trade Financialon Monday warned that it expected full-year earnings per share to be sharply below its previous forecasts as it increases provisions for bad loans, and writes down the value of some mortgage linked securities.
The brokerage's shares fell more than 8% in extended traded after the news.
E*Trade, which plans to exit the wholesale mortgage business, said it expected charges of about $32 million for that and other restructuring moves, most of which will fall in the fourth quarter.
It will streamline its direct mortgage lending business to focus on its retail operations.
E*Trade President and Chief Operating Officer Jarrett Lilien said E*Trade's future balance sheet growth would come from retail assets.