Bank of America is spinning off its Japanese joint private banking venture, selling its 49 per cent stake to its partner Mitsubishi UFJ Financial Group.

Bank of America is spinning off its Japanese joint private banking venture, selling its 49 per cent stake to its partner Mitsubishi UFJ Financial Group.

Merrill Lynch Japan Securities owns 49.2 per cent of the Mitsubishi UFJ Merrill Lynch PB Securities venture, while The Bank of Tokyo-Mitsubishi UFJ owns 41.18 per cent and Mitsubishi UFJ Securities Holdings owns 9.8 per cent.

The Japanese joint venture succeeded the private client division of Merrill Lynch Japan Securities in May 2006, and provides private banking services to high net worth individuals in Japan. (Merrill Lynch Japan Securities is a wholly-owned subsidiary of Merrill Lynch International, which is in turn owned by Merrill Lynch, acquired by Bank of America in 2009.)

Operating revenue at the unit at March 2012 was JPY25 billion (around $0.3 billion) and the value of deposited assets was JPY1.8 trillion.

Following the change in shareholding, due on December 26, The Bank of Tokyo-Mitsubishi will own 49 per cent of the business and Mitsubishi UFJ Securities will own 51 per cent. Both are subsidiaries of Mitsubishi UFJ Financial Group. Meanwhile, also as of December 26, 2012, Toshiyuki Morioka will become representative director and president of the private banking unit. He is currently representative director and chief operating officer; Miwa Ohmori is representative director and chief executive.

Going forwards Bank of America Merrill Lynch will focus on global markets, corporate and investment banking in Japan. The move follows other global restructuring at the firm such as the sale of its non-US wealth business in August. Broadly, it is focused on its global banking and markets division outside the US. As such it agreed to continue to provide certain products to Julius Baer after the sale, and similarly will continue to partner with Mitsubishi UFJ Merrill Lynch PB Securities, which is also retaining its current name for the time being.

The changes come at a time when many global banks are reviewing their activities and selling units which haven't managed to gain sufficient scale or profitability. For example, UBS Global Asset Management yesterday announced the sale of a Canadian investment management business to a locally-listed firm, Fiera Capital. Meanwhile, Goldman Sachs is pulling out of the South Korean asset management business just five years after entering the highly competitive market, saying the business had not lived up to its expectations. Yesterday it emerged Deutsche Bank is merging its Swiss wealth units to boost profitability in the country.