(6 July 2009 – Global) Two of the world’s big banks have come to a loan sharing agreement that pool lending resources with the intent of gaining investment banking business.American’s Morgan Stanley and Japan’s Mitsubishi UFJ Financial Group (MUFG) have come to an agreement in which they will pool their lending resources, designed to help win more investment banking business.
The new agreement expands the scope of their previously announced strategic alliance into new geographies and businesses.
The banks will create a loan marketing joint venture in the Americas starting initially in the U.S., and business referral arrangements in Asia, Europe, the Middle East and Africa.
The agreement calls for the establishment of a joint venture that would provide loans to companies throughout North America. It said the companies would have combined loan commitments to U.S. companies of more than US$100 billion.
MUFG and Morgan Stanley have agreed on term sheets under which they will pursue arrangements to leverage their respective relationships with customers in Asia, specifically, ASEAN, India, Australia, Korea, Taiwan and Hong Kong, and in Europe, the Middle East, and Africa through referrals of new business opportunities.
The arrangements are intended to cover a number of products and services, including capital markets, loans, fixed income sales and other ancillary businesses.
The agreement will give Morgan Stanley greater capacity and opportunity to compete with the likes of Bank of America, JP Morgan and Citigroup, which dominate the loans market in America.