Morgan Stanley (MS) will take a 30 percent stake in Mitsubishi UFJ (8306) Financial Group Inc.’s Japanese wealth-management business in the latest partnership between the two banks, according to a person briefed on the matter.
Mitsubishi UFJ, which owns 22 percent of Morgan Stanley, will continue to run the business, which offers investing services to wealthy individuals in Japan, said the person, who asked to remain anonymous because the deal hasn’t been announced. New York-based Morgan Stanley will provide research and investment products when the partnership takes effect in January, the person said. Terms of the agreement weren’t immediately available.
Morgan Stanley Chief Executive Officer James Gorman, 55, has pointed to the firm’s ties with Mitsubishi UFJ, Japan’s biggest bank, as a strategic advantage as the Asian nation’s economy expands. The companies set up a pair of investment-banking ventures in Japan in 2010, two years after Mitsubishi UFJ invested $9 billion in Morgan Stanley to help it stay afloat in the financial crisis.
Japanese households, which hold most of their $16 trillion of financial assets in cash, may shift more of their money to equities as market prospects improve, according to a September report by Cap Gemini SA (CAP) and Royal Bank of Canada. The country’s stocks are the best performers among major developed markets this year as Prime Minister Shinzo Abe tries to spark inflation with fiscal and monetary stimulus.
Credit Suisse Group AG, Switzerland’s second-biggest bank, last year bought HSBC Holdings Plc’s Japanese private banking operations and began taking over Standard Chartered Plc’s wealth-management accounts in the country.
Mitsubishi UFJ’s wealth-management business was previously a joint venture between Mitsubishi UFJ and Bank of America Corp.’s Merrill Lynch brokerage. Charlotte, North Carolina-based Bank of America last year agreed to sell its 49 percent stake back to Mitsubishi UFJ.
The unit’s name will change to Mitsubishi UFJ Morgan Stanley PB Securities from Mitsubishi UFJ Merrill Lynch PB Securities, the person said.
Nikkei reported the partnership yesterday.