Morgan Stanley's wealth management subsidiary is being bought out by Credit Suisse. The subsidiary has interests in Africa, Europe and the Middle East and is said to have a portfolio with total value at US$13 billion.
The exit by Morgan Stanley is a move to offset its exposure in the more volatile world of investment banking. This portfolio though is small compared to the overall portfolio that Credit Suisse carries in its private banking operations said to be worth 800 billion Swiss francs or US$838.27 billion.
The deal only serves to highlight Credit Suisse's thrust to boost its private banking operations, which provides a more stable revenue stream compared to the volatility of investment banking.
Morgan Stanley for its part is refocusing its wealth management focus in the United States, which CEO James Gorman is expecting stable returns to compensate for the uncertainty of returns from trading and investment banking operations.
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