MUFG, Morgan Stanley to deepen alliance, merge some Japan operations

By Makiko Yamazaki

TOKYO (Reuters) – Mitsubishi UFJ Financial Group (NYSE:) and Morgan Stanley (NYSE:) said on Tuesday they will deepen their 15-year old alliance by combining some operations at their Japanese brokerage joint ventures.

The cooperation, to be implemented in the first half of 2024, builds on a partnership that started with MUFG’s $9 billion investment in Morgan Stanley at the height of the global financial crisis in 2008.

The expanded alliance will combine their Japanese equity research, sales and part of execution services for institutional clients at their two Japanese brokerage joint ventures, Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities.

Their equity underwriting business will also be reshuffled within the two brokerage units, they said.

Combined net operating revenue of the two brokerages stood at 381.3 billion yen ($2.76 billion) in the year to March, close to Nomura Securities’ 488.7 billion yen.

The two created the joint ventures in 2010 as a result of MUFG’s 2008 investment.

They initially aimed for a full merger of their Japanese brokerages but later scaled that back to a partial integration, stymied in part by differences in business models, systems difficulties and regulatory hurdles.

MUFG and Morgan Stanley said they would also collaborate on foreign exchange trading. MUFG’s main banking unit will use Morgan Stanley’s global foreign exchange business platform for the merit of scale and for a more competitive offering to its clients.

MUFG owns 22% of Morgan Stanley. Their partnership includes global investment banking and wealth management.

($1 = 138.2600 yen)

(This story has been corrected to say Nomura Securities, not Nomura Holdings (NYSE:), in paragraph 5)