MUFG says Morgan Stanley deal to boost Asia business

"The Morgan Stanley deal will contribute strongly to our Asian businesses," Tetsuya Wada, managing executive officer of the Bank of Tokyo-Mitsubishi UFJ Ltd, the group's core unit told Reuters at the sidelines of a trade conference in Perth.

"They have a very strong expertise in Asia, so if we work together with them, the total power MUFG is going to be much higher than where it is now."

Wada said Australia also offers strong growth potential for MUFG, thanks to the country's vast resources, stable governance and expected population growth.

Mitsubishi UFJ on Monday completed a $9 billion deal to take a 21 percent stake in beaten-down U.S. investment bank Morgan Stanley.

Often described as Japan's most conservative lender, MUFG is now making an aggressive push into the United States, looking to capitalize on a credit crisis that has crippled its Wall Street rivals.

The Japanese bank, which has so far avoided heavy subprime losses, last month paid $3.5 billion to take full control of California regional bank UnionBanCal Corp , as it bets on long-term growth in the world's largest economy.

Mitsubishi UFJ is looking to grow beyond its softening home market where it is saddled with slow domestic growth and a declining population.

Asked if MUFG is also seeking acquisitions in Asia, Wada said: "We are studying opportunities in Asia," and described the region as having the "most strategic and important value" to the MUFG unit.

Wada also said MUFG's financials remain solid despite the current credit crisis and that he believed the worst of the financial turmoil is coming to an end.

"I think we are slowly starting to recover because every country is devoted to stabilize the situation," he said.

Asian stocks surged for a second day on Tuesday, with Japan's Nikkei up a record 14 percent, as investors hoped plans from governments around the world to take stakes in banks will stabilize the global financial system and mark an end to the worst of the crisis.

(Reporting by Fayen Wong; Editing by Lincoln Feast)