) announced its decision to divest its private wealth management
unit in India to
Standard Chartered PLC
). The sale is expected to be completed by the end of 2013.
However, the terms of the deal have not been disclosed.
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The deal comes as part of Morgan Stanley's plans to increase
focus on the other areas of business in India that include core
institutional securities, investment banking and asset
management. Standard Chartered is expected to initially pay $8
million for the India unit, which would be followed by an amount
that has not been disclosed.
The wealth management division in India was set up by Morgan
Stanley in 2008. The unit offered investment advisory services in
equity, fixed income and private equity. The unit currently has
approximately $800 million of assets under management. Further,
in 2012, the India unit accounted for approximately 5% of its
Morgan Stanley's decision to sell its wealth management unit in
India comes in view of the highly competitive Indian market,
which is posing a challenge for the company. Additionally, higher
staff expenses and frail markets battered the company's revenue.
Moreover, the stringent landscape restricted the growth
opportunities by putting a limit to its product offerings. All
these factors prompted Morgan Stanley to surrender its banking
license in India earlier in 2013 and sell off its wealth
management unit to Standard Chartered later on.
Morgan Stanley had earlier divested many of its business units
located worldwide. In Mar 2013, Morgan Stanley initiated the sale
of its European wealth-management business to
Credit Suisse Group AG
). The deal comprised assets worth $13 million and is expected to
be completed by the end of 2013.
Earlier in Feb, 2013, Morgan Stanley divested a section of its
global stock plan services (GSPS) business, which provides
employee stock plan record-keeping and automated trade execution
services to some of the top companies in the United Kingdom and
Europe, to Computershare Limited. The business is based in
Europe, Middle East and Asia (EMEA) region. The deal is likely to
be concluded in the second quarter of 2013.
Morgan Stanley's strategy to dispose unprofitable and non-core
business units might prove beneficial for the company in the near
Morgan Stanley currently carries a Zacks Rank #3 (Hold). In the
Ladenburg Thalmann Financial Services Inc
) is a better performing stock with a Zacks Rank #1 (Strong