Wealth management may not prove to be as wealth generating as Morgan Stanley hoped.
The bank is putting the squeeze on its operations, with reports emerging last week that it would cut 1,000 people from the unit. Also, back in December, it put its Spanish wealth management arm up for sale as part of plans to home in on super-wealthy clients. Outside the US, the bank believes it should look after only the very rich, with investable assets of more than $10m, from its offices in large financial centres, such as London and Geneva.
A range of Spanish and European lenders were thought to be interested in the unit, on which Morgan Stanley had slapped a price tag of up to €800m.
Now ABC reports that La Caixa has agreed to take the business off MS’s hands, but the price reported by the newspaper has fallen to about €600m.
It was previously suggested that the Spanish subsidiary could be valued at between 8 to 10 per cent of its assets, €640m to €800m.
And there’s more bad news potentially. ABC adds that the final price may yet move to take account of slumping markets over the past week.
Spain’s benchmark IBEX index fell almost 4 per cent last week after a Shanghai-esque bout of volatility, dropping 7.5 per cent on Monday and 4.5 per cent on Wednesday, before soaring 6.95 per cent on Thursday.
The IBEX is now off more than 13 per cent so far this year, and was down further at the start of the week, falling 2.1 per cent Monday.