MUFG in bid for Morgan Stanley's trust-banking assets

Mitsubishi UFJ Financial Group Inc. is in talks to buy Morgan Stanley's trust-banking assets, according to two sources with knowledge of the matter.

The assets are valued at about $4 billion, according to the sources, who asked not to be identified while talks are ongoing. UnionBanCal Corp., MUFG's San Francisco-based unit, plans to acquire the business, the they said. The Nikkei financial newspaper, which reported the negotiations on Sunday, said the deal will need approval from U.S. regulators.

The potential purchase by Morgan Stanley's largest shareholder underscores Japanese banks' interest in acquiring assets to expand as demographic changes, including a shrinking and aging population, slow lending demand at home. Also through UnionBanCal, Mitsubishi UFJ this month agreed to pay $3.7 billion for U.S. property lending assets from Deutsche Bank.