Dallas, Texas 05/05/2014 (FINANCIALSTRENDS) – Morgan Stanley (NYSE:MS) and Switzerland based Safra Group in a joint announcement on 30th April disclosed that they have signed off on a deal, where by the Swiss firm would be buying out the entire private banking operations of the New York head quartered financial institution. The move by Morgan Stanley (NYSE:MS) to exit the once most sought after banking operations in Switzerland, comes on the back of host of other foreign head quartered banks exiting the once famed financial hub known for its secretive banking laws in the past, buckling under international pressure and strengthened its rules to prevent money laundering.
Neither of the parties involved disclosed the financial terms under which this agreement has been inked. The Switzerland based financial institution has indicated that the acquisition is likely to be competed in the second quarter of 2015 after Government regulators give their go ahead.
The move by the Swiss based financial behemoth to grow inorganically via acquisitions falls in line with its stated goals to increase its operational foot print to compete strategically with its better entrenched completion. Explaining the business logic behind the buyout, Safra Group vice chairman Jacob Safra has been quoted to have said that, “We are determined to play a leading role in the consolidation of the Swiss private banking market. The Morgan Stanley business is an excellent fit with our strategic focus on providing tailor made solutions to ultra-high net worth clients.”
With the departure of Morgan Stanley (NYSE:MS) operations from its shores, Switzerland is said to be left with close to 120 foreign-owned banks and is down from the 145 such operations that were conducted in the country at the start of 2012 when international pressure on the country started to mount. It is also important to note that Morgan Stanley (NYSE:MS) has volunteered to work with the U.S. Department of Justice initiative to identify U.S based business and individuals who have undeclared assets hidden away in Switzerland.