Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, may seek to merge some of its overseas businesses with Morgan Stanley after buying a stake in the Wall Street firm last year, Bloomberg reported.
"We're not ruling out that possibility," said Tatsuo Tanaka, 62, deputy president of the company's main banking unit, Bank of Tokyo-Mitsubishi UFJ Ltd, in an interview yesterday. The two banks will consider whether to set up new joint ventures in markets outside Japan, he said.
Mitsubishi UFJ became Morgan Stanley's largest owner in October by investing $9 billion in the U.S. bank, which was trying to regain investor confidence after a stock rout. Mitsubishi UFJ also spent $3.6 billion last year to make San Francisco-based UnionBanCal Corp. a fully owned unit, and will consider additional investments in the U.S. and other overseas markets because of limited growth at home, Tanaka said.
Morgan Stanley and bigger rival Goldman Sachs Group Inc. turned themselves into bank holding companies regulated by the Federal Reserve last year after the credit crunch toppled Lehman Brothers Holdings Inc. Shares in Morgan Stanley have more than doubled after sliding to a low of $9.20 on Nov. 20, and closed at $20.80 in New York yesterday.
"Morgan Stanley looks to me like it could turn around and do very well for Mitsubishi UFJ," said Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo, which manages about $3.1 billion. "Morgan Stanley and Goldman Sachs have a good chance of coming through and doing well again."