Morgan Stanley, fresh off its announcement last week to convert from pure investment bank to commercial bank (Goldman Sachs did the same), has reached an agreement to sell a 21% stake of the company to Mitsubishi Financial for $9b. Earlier this year, Mitsubishi did the biggest bank deal of the year (at the time) by buying the third of Union Bank of California it didn’t already own in a deal valued at about $3.5b and giving UBOC a value of about $10b. Mitsubishi is the world’s second largest bank by deposits.
When the Morgan commercial bank deal was first announced, we were intrigued because they would tend to understand the jumbo lending marketplace perhaps better than some of the massive players because they cater to a higher end client. So this Mitsubishi deal certainly supports that since Union Bank is also a big player in the jumbo marketplace, and are one of a few players. So perhaps Morgan can now get some of that market as well. Their new partner would certainly know how to show them the way.