Mitsubishi is Japan’s largest banking group and the world’s second largest bank holding company with $1.1 trillion in bank deposits.
On Monday Morgan Stanley was given Bank Holding Company approval by the Federal Reserve which will allow it to operate as a commercial bank and give it access to Fed funding support.
Mitsubishi is set to invest in 20% of Morgan Stanley and a representative of Mitsubishi will join the Morgan Stanley board.
The banks say the partnership will not only bolster Morgan Stanley’s capital position but facilitate both banks’ efforts to enhance their global presence and market share in the financial services arena.
John J. Mack, chairman and chief executive officer of Morgan Stanley, says: “As one of the largest commercial banks in the world, Mitsubishi would be a valuable partner as we transition to a bank holding company and build our bank services and deposit base.
“This alliance also would build on Morgan Stanley’s deep ties and market leadership in Japan and throughout Asia, and help us to continue growing our business in this critically important region.”
The agreement is one of intent and is subject to due diligence.