New York: Morgan Stanley and Mitsubishi UFJ Financial Group have agreed to pool their lending resources, under an agreement designed to help win more investment banking business.
The agreement calls for the establishment of a joint venture that would provide loans to companies throughout North America. It said the companies would have combined loan commitments to US companies of more than $100 billion.
Tuesday’s agreement expands on the existing relationship between Morgan Stanley and Japan’s biggest bank.
Last year, during the heart of the financial crisis, Mitsubishi UFJ invested $9 billion in Morgan Stanley, making it Morgan Stanley’s largest investor.
Banks often provide low-cost loans to customers, and hope to use that lending as a base from which to win more business in other areas, such as in securities underwriting and merger advising. They often also provide the loans as a low-cost service to clients who already generate significant business elsewhere.
The venture “provides our clients with even stronger financing capabilities,” Morgan Stanley chief executive John Mack said in a statement.
The venture could give Morgan Stanley a greater ability to compete with rivals such as JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc, which combined make about two-thirds of US syndicated loans.