Morgan Stanley is in talks to sell its trust business to Japan’s Mitsubishi UFJ Financial Group, Bloomberg reported, citing individuals with knowledge of the matter.

The talks relate to a unit which provides trust services for $4
billion of client assets within Morgan Stanley’s wealth management
division, according to an individual, the report said today. No details
on the value of the transaction were given in the report.

The unit offers fiduciary and administrative services to wealthy
clients who want to set up personal trusts and is part of Morgan Stanley
Private Bank, which is led by Shelley O’Connor. 

It would be bought by Mitsubishi UFJ's San Francisco, CA-based arm,
UnionBanCal Corp, which already offers trust services, the sources said.
However, the assets will still be managed by Morgan Stanley advisors.

Bloomberg said negotiations were reported yesterday by Nikkei newspaper and added that the transaction remains subject to US regulatory approval.

Morgan Stanley had not responded to a request from this publication for comment in time for publication.

Background

Morgan Stanley chief executive James Gorman reportedly visited Tokyo
this month to meet with Mitsubishi UFJ. He has previously sold smaller
units of the brokerage division - which has $1.79 trillion in client
assets - as he "seeks to cut costs and boost returns," the report said.

The deal is one example of how many global banks have been reviewing
their activities and in turn spinning off unprofitable units. In a
similar move last December, Bank of America spun off its Japanese joint
private banking venture, selling its 49 per cent stake to its partner
Mitsubishi UFJ.
BoA Merrill Lynch will now focus on global markets, corporate and
investment banking in Japan. The move followed other global
restructuring at the firm such as the sale of its non-US wealth business
in the previous August.

Mitsubishi UFJ is Morgan Stanley’s biggest shareholder and partner in
two investment banking joint ventures; the Japanese bank owns a 22 per
cent stake in Morgan Stanley, according to data compiled by Bloomberg.