Summary: Seeking to expand its China operations, Morgan Stanley (NYSE:MS) acquired Nam Tung Bank, a small commercial bank located in the southern city of Zhuhai from Bank of China for an undisclosed amount. Nam Tung only has one branch and 30 employees, but what's important is its commercial-banking license and thus Morgan's ability to apply for and offer more products such as structured derivative products, home mortgages and corporate loans. Morgan's China CEO commented, "This platform will allow us to provide a wider array of new product capabilities that are currently offered only by commercial banks with a presence within China."
Related links: Full WSJ article • Goldman Knows China... • Morgan Stanley, A Solid Long Term Opportunity • UBS To Benefit from Chinese Banking Restrictions • China's Banking Sector Looks Better with New Corporate Bankruptcy Law • An Interesting Play on China's Banking Sector: Bank of East Asia • Developments in China's Banking Sector
Potentially impacted stocks and ETFs: American Express (NYSE:AXP), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), HSBC (HBC), Merrill Lynch (MER) and UBS AG (UBS) are among the largest foreign banking competitors in China.
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