Asia’s GFC deals 10 years on – so who won?
Sovereign funds and Japanese banks fared differently in their financial crisis deals. Nomura seems to have achieved the least.
The global financial crisis, despite its weighty worldwide name, was really a crisis of US and European financial institutions. Asia was just the place that supplied the capital to save them.
First it was the sovereign wealth funds – China Investment Corporation (CIC) into Morgan Stanley, GIC (Singapore) into UBS and Citigroup, Temasek into Merrill Lynch and Barclays, Korea Investment Corporation (KIC) into Merrill – and then it was the Japanese banks. We are now at the 10th anniversary of MUFG resuscitating Morgan Stanley by writing a cheque for $9 billion and Nomura buying the Asian and European assets of Lehman.
It is fair to say, looking back, that one of those deals has fared rather better than the other.
Euromoney has been talking to Nobuyuki Hirano, president and group chief executive of MUFG, and Morgan Stanley chief executive James Gorman on how their alliance has worked out. We can summarize it did the following things: stopped Morgan Stanley going under; provided an extremely welcome boost to MUFG’s profits consistently over the last 10 years; proved a useful investment (Morgan Stanley’s share price doubled from the struck price in 2008 and MUFG also got perpetual convertible preferred stock with a 10% dividend); and spawned a strikingly successful securities joint venture in Japan.