Morgan Mulls Acquiring Regional Banks
NEW YORK -- Morgan Stanley could be considering acquiring regional banks that overlap its existing brokerage and asset management clients, the Wall Street Journal reports.
The New York-based bank is also in the midst of reducing staff overseas amid the ongoing market turmoil, according to multiple reports.
In late October, Morgan Stanley said acquisitions were one consideration as it looks to increase its retail banking capabilities after becoming a bank holding company in September.
Amid the ongoing credit crisis, investment banks came under increased pressure in September as Lehman Brothers filed for bankruptcy protection and Merrill Lynch sold itself to Bank of America as the credit crisis mushroomed.
Morgan Stanley, along with Goldman Sachs , changed its structure to become a bank holding company shortly after the Lehman and Merrill fallout as investors worried about the viability of standalone investment banks.
The change allows Morgan Stanley to create a large deposit base and have wider and permanent access to financing from the Federal Reserve. Analysts have widely predicted Morgan Stanley, more so than Goldman Sachs, would push into the bank deposit business.
Aside from possible acquisitions, the bank said it planned to grow deposits by using the company's 8,500 financial advisers to raise client awareness of banking services available to Morgan Stanley's global wealth management group; introducing new banking products, such as savings accounts and global currency accounts; using the firm's Swiss bank to expand international operations; and initiating a campaign to expand current operations.
Separately, the Journal reported, citing unnamed sources, that Morgan Stanley cut nearly 15% of its work force in Dubai amid the ongoing credit crisis and global economic downturn. The bank had about 110 employees working in Dubai.
A Dow Jones Financial News report said Morgan Stanley also was slashing senior equity trading jobs in London as part of a broader plan to reduce jobs and expenses amid the slowdown.
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