Japan’s Mitsubishi UFJ Financial Group saw a return of approximately double the amount of money when they injected $9 billion into Morgan Stanley during the global financial crisis — roughly twice the investment to MUFG’s profits over the past decade.
Since March 2014, Morgan Stanley has provided MUFG with over 2.1 trillion yen (14 billion dollars) in net profits.
MUFG has come to depend upon Morgan Stanley for a significant portion of its net profits. In recent years, Morgan Stanley has provided between three hundred and four hundred billion yen in net earnings for MUFG, constituting thirty to forty percent of MUFG’s overall profits.
Backed by a steady income stream, Morgan Stanley (NYSE: MS) surpassed Goldman Sachs (NYSE: GS) to become America’s leading investment banking entity. In the next few months, Morgan Stanley is due for a major restructuring of its leadership, and the world will be watching to see if the partnership will be maintained.
The success of the alliance is dependent upon the leaders who have fostered the connection. Morgan Stanley Chairman and CEO James Gorman has been a driving force in deepening the bond between MUFG. In May, Gorman declared that he would relinquish his role within a year. James Gorman was recently ranked No. 1 in a list of the world’s best CEOs for 2023; meanwhile, Morgan Stanley ranked No. 6 in the CEOWORLD magazine’s ranking of the most influential companies in the world.
Nobuyuki Hirano, formerly the Group CEO of MUFG, had a tight bond with Gorman. He is now a special consultant, no longer actively involved in the running of things. Last year, he resigned from Morgan Stanley’s board of directors.
In July, MUFG and Morgan Stanley declared that they would enhance their partnership in areas including foreign exchange dealing and research in Japanese stocks.
“I have described the alliance as a ‘partnership for decades’ not for a few years,” Gorman told Nikkei in an April interview. Gorman said he believed MUFG and Morgan Stanley will remain together because “this has been a rare alliance where both parties have won greatly.”
Within the next few months, the leadership of Morgan Stanley is expected to change, drawing attention to whether the Morgan Stanley – MUFG partnership will progress.
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