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Mitsubishi and Morgan Stanley to merge Japan securities houses

Text by AFP

Latest update : 2008-12-10

Japan's largest bank and the troubled Wall Street firm will combine their securities operations to form a major player in Japanese financial services, following Mitsubishi UFJ's acquisition of a 21% stake in Morgan Stanley in September.

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 Friday.


The move follows the Japanese megabank's decision to buy a 21 percent stake in the ailing Wall Street giant for nine billion dollars, 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.

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.

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 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.

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 yen (31 million dollars) 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 yen last year.
 

Date created : 2008-10-03

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