Japan’s largest bank Mitsubishi UFJ Financial Group Inc has reached a basic accord with Morgan Stanley to merge their securities houses in Japan, a news report said yesterday.
The move follows the Japanese megabank’s decision to buy a 21 percent stake in the ailing Wall Street giant for US$9 billion, public broadcaster NHK reported, quoting unnamed informed sources.
Under the accord, Mitsubishi UFJ Securities Co and Morgan Stanley Japan Securities Co will merge, creating a heavyweight player in the Japanese financial services industry, the report said.
PHOTO: EPA
Further details such as a timing of the merger and a possible expansion of their businesses into other Asian countries will be discussed later, it said.
Mitsubishi UFJ said that it was still considering the options for its relationship with Morgan Stanley.
“No decision has been made as of this time,” it said in a brief statement.
Mitsubishi UFJ and Morgan Stanley have said they would come up with a “concrete strategy” by June next year for a global business alliance, with the Japanese bank sending a director to the Wall Street firm’s board.
PERSONNEL
Morgan Stanley Japan Securities, which has more than 1,600 employees and is strong in asset management for corporate clients, made a net profit of ¥3.2 billion (US$31 million) in the year to March.
Mitsubishi UFJ Securities, which has 6,500 workers in Japan and overseas, posted a net profit of ¥8.1 billion last year.
Japanese financial institutions have weathered the global financial crisis better than many of their Western peers thanks to cautious lending practices following their own bad loan crisis a decade ago.
Japan’s largest brokerage Nomura Holdings Inc has also seized the opportunity of Wall Street’s meltdown to buy the Asian, European and Middle Eastern operations of collapsed Wall Street titan Lehman Brothers.
BACK OFFICE
The Nikkei Shimbun business daily said yesterday that Nomura Holdings is to buy Lehman Brothers’ global back-office operations based in India for tens of millions of dollars, retaining the workforce of more than 2,000.
The back-office operations, based in the financial hub of Mumbai, handle trading settlement duties as well as information technology research and development. Nomura declined to comment.
On Thursday, Mitsubishi UFJ Trust and Banking Corp, a unit of Mitsubishi UFJ Financial Group, said that it would buy up to a 19.9 percent stake in British investment firm Aberdeen Asset Management PLC. for around US$380 million.
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