Morgan Stanley, the owner of a brokerage that has already hired 100 private bankers, may take this number to 500 by the end of 2011 to offer more products such as jumbo mortgages and structured loans to clients, Bloomberg reports, citing an unnamed source.

The firm is building a private bank to squeeze more revenue from clients and encourage them to hold deposits at the company, the report said. Morgan Stanley has become the world’s biggest brokerage of its kind through its Smith Barney joint venture with Citigroup, creating Morgan Stanley Smith Barney more than a year ago. The venture pits the Wall Street firm against Bank of America/Merrill Lynch.

The growth story largely applies to the US market, rather than to the international side of the business, Family Wealth Report understands.

Like some of its big rivals, Morgan Stanley is encouraging customers to do more business with the banks as the weak economy and new regulations make it harder to earn money from loans and investment banking, the report said.

The unit that will be the focus of the loan offerings is called Morgan Stanley Private Bank and registered with the Federal Reserve in April. The private bank is headed by Cece Stewart, whom Morgan Stanley hired in 2008 from Wachovia.

The private bank plans to as much as triple its loan balances to between $50 billion and $60 billion by the end of 2014, the news service said, according to its source.

The private bank will also offer deposit products to clients who hold more than $1.6 trillion of assets in the brokerage. Morgan Stanley considered buying a banking franchise before deciding to build its own private bank in the first half of 2009, the source told the news service.

This publication has reported on a number of expansionary moves by Morgan Stanley in recent months. In mid-June, it was reported that the firm intended to boost its private banker headcount in India – a key emerging market – by 50 per cent over the next 12 months.