Morgan Stanley’s wholesale banking license allows it to expand its lucrative wealth management business and boost lending.
The license from the Monetary Authority of Singapore enables the sixth largest U.S. bank by assets to operate one branch that can accept deposits of not less than $250,000.
Morgan Stanley said it transferred its Asian private wealth management business to bank branches in Singapore and Hong Kong on February 13. It explained the new structure will allow it to provide clients with a more comprehensive suite of wealth-management services and a broader and more flexible range of products.
Previously, Morgan Stanley's Asia wealth management business in Singapore was operated through a local entity. Under a new organization, however, its wealth management business in Asia will be conducted through branches of Bank Morgan Stanley AG, a Swiss subsidiary of Morgan Stanley Smith Barney.
Wealth management operations have been quite helpful in drawing deposits, especially U.S. dollars, to help with funding and expanding a bank’s lending business.
A Bloomberg report said Morgan Stanley Smith Barney, the world's largest retail brokerage, with 17,000 advisers and US$1.65 trillion under its management, forms the bulk of the bank's wealth-management division. The broker accounted for US$665 million in profit, or 16% of the firm's total, last year, and generated 41% of revenue, compared with 16% in 2006.
Asia has over 3.3 million millionaires. Expected wealth creation is at an annual rate of 8.7% for the Asia-Pacific.
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