Mitsubishi UFJ Financial Groups securities joint venture with Morgan Stanley will take a majority stake in the Japanese banks wealth-management business, deepening ties between the two firms.
Mitsubishi UFJ Morgan Stanley Securities will hold 75% of the private banking unit of Japans biggest lender, the two companies said in a statement in Tokyo last week, without disclosing a price. Mitsubishi UFJs main commercial banking unit will hold the remaining 25%.
Mitsubishi UFJ, which owns 22% of Morgan Stanley, will continue to run the business, which offers investing services to wealthy individuals in Japan, a person briefed on the matter said before the announcement. New York-based Morgan Stanley will provide research and investment products when the partnership takes effect in January, the person said.
Morgan Stanley chief executive James Gorman, 55, has pointed to its ties with Mitsubishi UFJ as a strategic advantage as the worlds third-largest economy expands. The companies set up a pair of investment-banking ventures in Japan in 2010, two years after the Asian lender invested $9 billion the U.S. firm 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 and Royal Bank of Canada. The countrys 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, Switzerlands second-biggest bank, last year bought HSBC Holdings Plcs Japanese private banking operations and began taking over Standard Chartered Plcs wealth-management accounts in the country.
Mitsubishi UFJs 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% stake back to Mitsubishi UFJ.
The units name will change to Mitsubishi UFJ Morgan Stanley PB Securities from Mitsubishi UFJ Merrill Lynch PB Securities, according to the statement. Its head office will move to the Otemachi business district in Tokyo from Nihonbashi.