Morgan Stanley's new private bank is looking to hire hundreds of bankers experienced in providing mortgage and other lending services to wealthy clients.
The buildout of Morgan Stanley Private Bank N.A., which registered with the Federal Reserve in April, comes as rival institutions also are expanding private banking services with an eye toward developing revenue streams beyond investment banking, trading and asset management. Citigroup, for instance, hired about 15 private bankers since March and will add another 115 over the next several years, a spokesman told Bloomberg News. Meanwhile, both Bank of America and Wells Fargo are stepping up efforts to persuade customers to move money from accounts they have with other banks and brokerages.
Morgan Stanley Private Bank already has hired 100 bankers to sell loan products including jumbo mortgages, home-equity lines and securities lending, according to Bloomberg. It also plans to offer some commercial loans later this year. The unit may add as many as 400 more private bankers by the end of next year, aiming to boost its loan balances from $19 billion at present to $50 - 60 billion by the end of 2014.
The private bank's top executive is Cece Stewart, a long-time Wachovia executive who Morgan Stanley hired in 2008.
The private bankers will obtain much their business through financial advisors at Morgan Stanley Smith Barney, the joint venture retail advisor network controlled by Morgan Stanley. Bloomberg adds:
The effort is likely to lower the wealth-management unit's compensation ratio over time, according to two people briefed on the matter. The division's ratio of compensation costs to revenue was 64 percent in the first quarter, compared with 41 percent in the institutional securities business, which includes the trading and investment banking units.