Morgan Stanley beats Goldman Sachs in Japan

TOKYO: Morgan Stanley beat Goldman Sachs Group Inc to become the most profitable foreign securities firm in Japan last fiscal year after it boosted structured-product sales and managed the two biggest initial public offerings.

Net income at Morgan Stanley MUFG Securities Co rose 32 per cent to 29 billion yen (RM1.12 billion) in the year ended March 31, the most among 10 large global banks that submitted annual financial statements.

The venture with Mitsubishi UFJ Financial Group Inc posted its biggest revenue in three years as Japan’s introduction of negative interest rates prompted clients to seek assets with better returns than government bonds.

It also underwrote the debut share sales of Kyushu Railway Co and Line Corp, the largest in Japan last year.

“We are committed to growing our businesses in Japan where the national-level reforms offer exciting potential,” said chief executive officer Jonathan Kindred. He was referring to initiatives such as the government’s efforts to make Tokyo a global financial hub.

Morgan Stanley’s fees for fixed income-related sales and trading climbed 22 per cent to 43.7 billion yen, according to the filing to the Financial Services Agency.

Goldman Sachs generated the second-highest revenue as well as profit, which totalled 22.1 billion yen in the year ended December 31. The firm’s headcount dropped by 46 over the 12 months, bringing it roughly level with JPMorgan Chase & Co.

This year, Goldman Sachs is advising Toshiba Corp on the sale of its memory-chip business, a transaction that may fetch about US$19 billion (RM81.5 billion), and it’s working with the finance ministry on its sale of an additional stake in Japan Post Holdings Co.

JPMorgan posted the thirdlargest profit, followed by Deutsche Bank AG, while BNP Paribas SA had the third-biggest revenue. The French bank has also been growing in structured products, hiring about 30 people here since January, and plans to recruit more this year, said sources earlier this month.