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Morgan Stanley to move retail bank to Charlotte?


Commoner

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They still need branches though....still no more word on where they will acquire those. If they are HQ'd here, I could see them doing some ground-up branches in the metro, but it certainly not an efficient way to enter retail banking. They're going to have to acquire someone. At this point, I'm not sure how selective they will be with their geography. Now that stocks like Region's and 5/3's stock prices have been hammered hard, they could be compelling targets, with government backing of course. :)

There are more and more successes with an online banking model these days. They could conceivably approach it that way and take it slow on physical locations.

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^True, but I was thinking more along the lines of wanting an instant deposit base.

Long term, I have to think they want brick and mortar branches. Their brand name is very valuable which would help pull customers more than price competition online.

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I can't imagine any scenario which would cause large numbers of people to start moving their money from another bank to Morgan Stanley. Certainly nothing that would warrant putting branches on the street. I can imagine a lot of scenarios where they won't even exist 5 years from now given the losses their stock is taking.

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^Indeed. But it doesn't change anything I said.

Retail branches are hugely expensive to build and operate. They exist because retail customers (i.e. Grandma, Joe the Plumber, the owner of Debbie's Hair Salon) expect to see brick and morter buildings, or their money isn't going there. This isn't based on need as most banking can now be done outside these places, but retail banks looking to attract retail deposits won't unless they have them. The banks have looked for decades on ways to get rid of them, but it has not happened. The need for them is based on the emotion that people want to "see" a bank before they will do business with them. How many people do you know that deal exclusively with virtual banks?

Morgan Stanley has the problem that it is now a $15B company and those fortunes are shrinking every day. They simply don't have the resources to build a retail branch system especially in a state like NC where they will have to try and wrestle the business away from all the other banks that are already here. Without the business they can't justify the branches and without the branches they have no business. They also have the problem the average person also only knows Morgan Stanley as "one of those Wall Street banks" and will avoid them. They better keep secret they hired Wachovia's execs.

This of course is only relevant if they decide, for some reason that I can't imagine either, to pack their bags and move to Charlotte.

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My point was they will buy deposits, and I suspect this will be in the form of a brick and mortar established as opposed to say Emmigrants Banks. While online banks are cheaper to physically opperate, they offer higher interest rates as compensation, so from a net revenue perspective, they aren't necessarily more profitable. I suspect that MS seems themselves as too established to not want a physical presence.

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They still need branches though....still no more word on where they will acquire those. If they are HQ'd here, I could see them doing some ground-up branches in the metro, but it certainly not an efficient way to enter retail banking. They're going to have to acquire someone. At this point, I'm not sure how selective they will be with their geography. Now that stocks like Region's and 5/3's stock prices have been hammered hard, they could be compelling targets, with government backing of course. :)

You're right, and that's what concerns me. 5/3 and Regions both look attractive as instant deposit bases. In fact, those are probably the two most attractive that can be had at some sort of discount (BBT doesn't come cheap). Unfortunately, for our purposes, both Regions and 5/3 have substantial existing infrastructure in Birmingham and Cincy, respectively. It would be prohibitively expensive to abandon those cities for Charlotte, in my opinion. Though they certainly want something of that scale, I figure a best case scenario for us would be for MS to acquire a bank like Synovus -- they've withstood the downturn relatively well but are still steeply discounted. Their HQ is in Columbus, GA. There's no way Ben Jenkins relocates to Columbus...

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I can't imagine any scenario which would cause large numbers of people to start moving their money from another bank to Morgan Stanley. Certainly nothing that would warrant putting branches on the street. I can imagine a lot of scenarios where they won't even exist 5 years from now given the losses their stock is taking.

You'd be surprised how successful MS has been in growing deposits since their BHC conversion in the Fall. You're not going to grow a top-50 deposit base overnight, but by offering high yield returns to existing brokerage customers, they've gotten off to a good start. There is, after all, a lot of cash on the sidelines.

Also, for what it's worth, as recently as 2006, Morgan Stanley was already had of the 40 largest deposit bases in the U.S.

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^Indeed. But it doesn't change anything I said.

Morgan Stanley has the problem that it is now a $15B company and those fortunes are shrinking every day. They simply don't have the resources to build a retail branch system especially in a state like NC where they will have to try and wrestle the business away from all the other banks that are already here. Without the business they can't justify the branches and without the branches they have no business. They also have the problem the average person also only knows Morgan Stanley as "one of those Wall Street banks" and will avoid them. They better keep secret they hired Wachovia's execs.

This of course is only relevant if they decide, for some reason that I can't imagine either, to pack their bags and move to Charlotte.

What does MS's market capitalization have to do with it's ability to make capital expenditures? You understand that they're not related, right?

As for their decision to hire Wachovia executives to run their retail franchise, I don't know how this could possibly hurt them in any material respect. Wachovia's retail franchise was one of the most well-respected in the industry. If anything I would think that it would be helpful (though not materially). Whatever deposits that actually deters couldn't be commercially significant.

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Is SCBT, NA too small for them to go after as an opener in the region? I know it only gets them branches in the Carolinas, but it could be a start.

Let SC keep at least some of their homegrown banks. Charlotte has gobbled up enough of them already through BOA and Wachovia and their predecessor institutions. I know banks don't care anything about that, but I'm just being a little sentimental here.

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  • 4 weeks later...

John Mack, CEO of Morgan Stanley, was asked yesterday if rumors were true that the retail banking operations would be based in Charlotte. He confirmed that it was something they were considering, but said it was too early to say for certain.....I'll take that as a yes.

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John Mack, CEO of Morgan Stanley, was asked yesterday if rumors were true that the retail banking operations would be based in Charlotte. He confirmed that it was something they were considering, but said it was too early to say for certain.....I'll take that as a yes.
I read the same story in the "O" yesterday. Only time will tell.
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Well, it looks like Morgan Stanley may be shopping for uptown office space as well-- as much as 150,000 sqft to house their retail bank operations. Some real estate brokers are speculating this in Charlotte Biz journal article. If someone that has an account can get more detail out of the full article, that would be great :)

Well, looking at a commercial leasing database, it appears that 147,000 additional sq. ft. of office space was recently leased (or at least secured with a letter of intent) at 440 S. Church (the Novare/Trinity tower). Sound like a good chance this is Morgan Stanley or possibly GMAC. I doubt it is a large relocation within Uptown for a variety of reasons, so I think there is good cause to be hopeful that 500-600 jobs are heading to Uptown.

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All I can say about MS is that they are still looking at relocating here (most likely their newly created retail banking division). They wanted to be here around springtime, but now it may not be until next year. They are trying to expand into retail banking (they need to buy or build branches) and they are being held up by the federal government. I have a direct source (no it is not the Observer) and I am not making this up.

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  • 3 months later...

Morgan Stanley finally seems to be moving forward on some hiring for the retail bank here in Charlotte. They just posted 4 positions (some positions will have multiple hires) for their retail bank to be based here earlier this week. Additionally, they have 13 openings in their retail bank in Purchase, NY (White Plains), which I believe is their second largest corporate offices outside of Manhattan. These positions seem to be focused on developing a retail sales strategy to existing wealthy Morgan Stanley clients, so it appears that they are not in a hurray to dive into bricks-and-mortar retail banking by buying an existing franchise (which is consistent with what John Mack has been saying for a month or so).

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  • 2 months later...

There was an article in the "O" today about Morgan Stanley ramping up hiring efforts for the retail bank in both Charlotte and New York. No word on where the HQ will actually be located though. It did also mention that MS will build the bank from within as opposed to buying another bank.

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  • 4 weeks later...
  • 3 months later...

Is it time to give up on the MS retail bank? After the august article that said the operations will be grown organically I have seen no sign of hiring locally (although I am not in the business so I may have missed it) and there are only two jobs posted on the MS site in Charlotte (both titled "Retail Banking - Portfolio" but both descriptions are focused on wealth management product development -- isn't this what Smith Barney already does?).

I guess I am just puzzled, puzzled that they made some high profile hires last year and have done nothing (from my vantage point) with them. Puzzled that they have chosen to sit out a period of extraordinarily cheap acquisitions (see BB&T and Colonial). And puzzled that their meager efforts in Charlotte appear to duplicate their existing expertise.

Does their BHC status require them to develop any business lines? Have they made any noises about abandoning this status (like Goldman)?

Can anyone with better information (altrvr and commoner among others) offer any information?

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Is it time to give up on the MS retail bank? After the august article that said the operations will be grown organically I have seen no sign of hiring locally (although I am not in the business so I may have missed it) and there are only two jobs posted on the MS site in Charlotte (both titled "Retail Banking - Portfolio" but both descriptions are focused on wealth management product development -- isn't this what Smith Barney already does?).

I guess I am just puzzled, puzzled that they made some high profile hires last year and have done nothing (from my vantage point) with them. Puzzled that they have chosen to sit out a period of extraordinarily cheap acquisitions (see BB&T and Colonial). And puzzled that their meager efforts in Charlotte appear to duplicate their existing expertise.

Does their BHC status require them to develop any business lines? Have they made any noises about abandoning this status (like Goldman)?

Can anyone with better information (altrvr and commoner among others) offer any information?

Be patient. You will hear more shortly.

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