© Reuters. FILE PHOTO: People stand in line inside a branch of Tokyo-Mitsubishi UFJ Bank of Mitsubishi UFJ Group (MUFJ) in Tokyo, Japan, on February 1, 2016. (Reuters) / Yuya Shino / File Photo
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by Makiko Yamazaki
TOKYO (Reuters) – Mitsubishi UFJ Financial Group (NYSE:) and Morgan Stanley (NYSE:) said on Tuesday that it will deepen its 15-year-old alliance by combining some operations in joint Japanese brokerage ventures.
The collaboration, which will be implemented in the first half of 2024, builds on a partnership that began with MUFG’s $9 billion investment in Morgan Stanley at the height of the global financial crisis in 2008.
The expanded alliance will combine Japanese equity research with sales and a portion of execution services for institutional clients of the two joint Japanese brokerage firms, Mitsubishi UFJ Morgan Stanley Securities and Morgan Stanley MUFG Securities.
They said their stock underwriting business will also be reorganized within the two brokerage units.
Combined net operating income for the two brokerages was 381.3 billion yen ($2.76 billion) in the year ending in March, close to Nomura Securities’ 488.7 billion yen.
The two created the joint ventures in 2010 as a result of MUFG’s investment in 2008.
They initially aimed for a full merger of their Japanese brokerage firms, but later reduced this to a partial integration, which has foundered in part due to differences in business models, systemic difficulties and regulatory hurdles.
MUFG and Morgan Stanley said they would also cooperate in forex trading. MUFG’s flagship banking unit will use Morgan Stanley’s global foreign exchange business platform for a scale advantage and for a more competitive proposition 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, no Nomura Holdings (NYSE:), in paragraph 5)
