Financial Roundup: Morgan Stanley Tries Retail, Lending Trust Eroding, Biotech Firms Lack Capital, Citi Buys Spanish Builder

Morgan Stanley races into retail banking — White shoe investment firm Morgan Stanley is racing into banking for Ordinary Joes two months after converting into a bank holding company. The bank is expected to buy several small or middle-sized regional banks to cross-sell typical banking services plus investments [Source: The Wall Street Journal]

Service, trust eroding — A CFO.com survey shows that the credit crisis has soured bank-client relationships and that the $700 billion federal bailout won’t do much to help. About one third of executives surveyed don’t believe normal banking relations to return until next year’s fourth quarter. [Source: CFO.com]

Biotech firms hit by lack of capital — Money flowing to biotech companies through the first nine months of this year is an anemic $8.2 billion or about 54 per cent of that for the period last year. With funding scarce, biotech firms are slashing jobs, cutting salaries and shrinking ofices. [Source: The Boston Globe]

Citi buys Spanish construction firm — A Citigroup infrastructure fund is buying a highway-building unit of Spanish construction firm Sacyr Vallehermoso for $10 billion. [Source: Huffington Post]

AIG to sell bank — Troubled American International Group has agreed to sell AIG Private Bank for $253.6 million to Aabar Investments PJSC, based in Abu Dhabi and United Arab Emirates. [Source: businessinsurance.com ]