Morgan Stanley has received a wholesale banking license from the Singaporean financial watchdog, allowing the US bank to accept deposits to expand its private banking business in the region.

The license, granted last month from the Monetary Authority of Singapore enables the sixth-largest US lender to operate one branch that can accept deposits of $250,000 and over in the city-state, the bank confirmed via emailed statement. The news comes on the heels of gaining a similar license in Hong Kong, which it obtained late last year.

AMorgan Stanley spokesperson confirmed that the firm's wealth management business in Asia was granted a bank license by the MAS in February and by the HKMA late last year.

The spokesman said: "We received regulatory approvals from the MAS in February and from the HKMA late last year to establish bank branches in Singapore and Hong Kong respectively. Accordingly, we transferred our Asian Private Wealth Management business to bank branches in Hong Kong and Singapore on 13 February."

"The new structure will allow us to provide clients with a more comprehensive suite of wealth management services and a broader and more flexible range of products."

Before, Morgan Stanley's Asia private wealth management business in Hong Kong and Singapore was operated through a local entity. Under the new structure its wealth management business in Asia will be conducted through branches of Bank Morgan Stanley, the Swiss subsidiary of Morgan Stanley Smith Barney.

At a time when margins are thin all round, the new structure will allow the bank to take client deposits and expand its lending capabilities.

Morgan Stanley Smith Barney, the world's largest retail brokerage with 17,000 advisers and $1.65 trillion under management, forms most of the bank's wealth division. The broker contributed $665 million in profit, or 16 per cent of the firm's total, last year, and generated 41 per cent of revenue, compared with 16 per cent in 2006.

Asia has over 3.3 million millionaires, surpassing the number in Europe for the first time last year, according to Merrill Lynch and Capgemini. Asia-Pacific wealth is predicted to grow at 8.7 per cent this year.

Morgan Stanley did not immediately return calls for comment.