Moving ahead with its strategy to shed non-core operations and
) is contemplating the divestiture or closure of its Swiss
private banking unit - Bank Morgan Stanley AG. The discussion of
the same was first revealed by Swiss financial news site
Morgan Stanley's Swiss banking unit managed assets worth nearly
$11.3 billion (CHF 10 billion) as of Dec 31, 2013. Further, the
division employs around 130 people in Zurich and Geneva. Notably,
the announcement for divestiture could come as early as the
second quarter of 2014.
Morgan Stanley has been reviewing and realigning its business
strategy to focus mainly on wealth management operations.
Further, with the completion of its remaining stake buy in Morgan
Stanley Wealth Management (MSWM) from
), the company's dependence on volatile trading revenues has
Additionally, in Europe and Asia, Morgan Stanley has decided to
streamline its footprint, defer expansion plans and exit certain
parts of its businesses. All these are expected to drive
earnings growth in the future.
Of late, Morgan Stanley is in the process of selling
non-core/unprofitable units. In Dec 2013, the company announced
the sale of Global Oil Merchanting Unit to a Russia-based Rosneft
Oil Company. Further, the company is exploring strategic options
for the sale of its stake in
Transmontaigne Partners L.P.
Additionally earlier that year, Morgan Stanley divested its
wealth management divisions in Europe, the Middle East and Africa
Credit Suisse Group AG
). However, the Swiss private banking unit was not the part of
the deal at that time.
We believe that Morgan Stanley's initiatives to vend non-core
operations will aid in enhancing profitability.
Currently, Morgan Stanley carries a Zacks Rank #3 (Hold).
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