Morgan Stanley deepens strategic alliance with MUFG

Mitsubishi UFJ Financial Group Inc. and Morgan Stanley will merge some operations at their Japan-based joint ventures, in the first major reorganization since the two entities were formed more than a decade ago. 

The companies will integrate Japan equity sales for institutional clients, along with corporate access, research and a part of execution services, MUFG and Morgan Stanley said in a statement on Tuesday. The banks also agreed to collaborate on foreign-exchange trading. 

Japan’s largest lender invested $9 billion in the Wall Street bank at the height of the financial crisis in 2008, acquiring a 20% stake. Following the alliance, they set up two securities joint ventures in Japan in 2010. 

Morgan Stanley MUFG Securities Co. is 51% owned by the US bank, while Mitsubishi UFJ Morgan Stanley Securities Co. is 60% held by the Japanese lender. The business functions being consolidated will be transferred to the Morgan Stanley-led entity. 

Morgan Stanley Chief Executive Officer James Gorman said the initiatives are examples of how the two firms can “deepen our strategic alliance over the years to come.” 

MUFG CEO Hironori Kamezawa said the firms will collaborate to enhance their partnership “for the coming decades.”

Job cuts aren’t the purpose of the overhaul, Yuki Hasegawa, a managing director at Morgan Stanley MUFG Securities, said at a briefing in Tokyo. 

As part of the move, about 100 staff from the MUFG-led entity will move to the Morgan Stanley-led venture, said Sachiko Toyama, a spokeswoman for Mitsubishi UFJ Morgan Stanley. 

The banks plan to implement the changes in the first half of 2024, subject to regulatory approval. They will keep the two joint ventures because the structure is best suited to serve clients, said Iichiro Takahashi, a planning manager at MUFG. 

The tie-up on foreign exchange will involve MUFG’s main banking unit using the trading platform of the Morgan Stanley-led venture, while sales will remain independent at each firm.