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Japan's MUFG to leverage Morgan Stanley expertise in wealth management foray – Nasdaq

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HONG KONG, July 7 (Reuters) - Mitsubishi UFJ Financial Group
Inc (MUFG) <8306.T> aims to tap into the expertise of partner
Morgan Stanley <MS.N> and expand into wealth management, as
Japan's biggest bank looks for new sources of revenue, its chief
financial officer said on Friday.
    The lender plans to launch a new wealth management unit in
Japan at the start of the business year beginning April 2018,
and targets 50 billion yen ($439.95 million) in annual operating
profit within four to five years, Muneaki Tokunari told Reuters.
    MUFG's foray into wealth management comes as profitability
at Japan's banks is pressured by negative interest rates and
tepid corporate demand for cash during a period of weak economic
    The new wealth management business will operate under the
MUFG brand leveraging the expertise of U.S. bank Morgan Stanley,
of which the Japanese lender is the single largest shareholder
with a 23.4 percent stake, Tokunari said.
    "We would introduce some wealth management knowledge and
expertise from Morgan Stanley, because they have successfully
expanded their wealth management business (in the United
States)," he said.
    "We have seconded many young recruits to Morgan Stanley to
get some hints, to get some expertise from their wealth
management business."
    MUFG and Morgan Stanley already have a flourishing
securities brokerage joint venture in Japan, stemming from a $9
billion lifeline the Japanese lender provided the Wall Street
bank at the height of the financial crisis at the end of the
last decade.
    Tokunari said the new wealth management business would
mainly target MUFG's existing small and mid-sized corporate
clients, offering investment products and solutions.
    Private wealth rose 1.1 percent last year in Japan to $14.9
trillion, and is likely to reach $16.2 trillion by 2021, showed
consultancy BCG's latest Global Wealth Market report.
    Of the total, 59 percent is in the form of cash and deposits
representing significant opportunity for wealth managers to
channel dormant funds into investments, analysts said.
    ($1 = 113.6500 yen)

 (Reporting by Sumeet Chatterjee; Editing by Christopher
 ((sumeet.chatterjee@thomsonreuters.com; +852-2847 2094; Reuters
Messaging: sumeet.chatterjee.thomsonreuters.com@reuters.net))

Keywords: MUFG ASIA/