The Russian subsidiary of Morgan Stanley said on Monday it plans to sell its mortgage lending unit.
Morgan Stanley bought the City Mortgages bank in 2006 in a deal valued at $185 million, or 4.75 times the book value. Russian business newspaper Vedomosti quoted a source close to the deal as saying Morgan Stanley is now seeking 2.5 times the book value. City Mortgages has capital of 1.7 billion rubles ($72.03 million) and is rated 142nd among Russian banks by assets.
Vedomosti said Morgan Stanley has started a due diligence process for City Mortgages and is taking offers. The sale is part of a wider plan to scale back Morgan Stanley’s home-lending business, which was hit by the global credit crunch. Morgan Stanley plans to shut down its UK mortgage origination business in June. (Reuters)