Morgan Stanley ( MS) CEO John Mack said the bank is considering buying a U.S. regional bank to build up its retail banking operations, Japan's Nikkei reports.

"Now that we're a bank holding company, deposits are important to us," Mack told Nikkei. "We are looking for potential opportunities to buy a bank that has a presence in an important market in the United States."

Morgan Stanley and rival Goldman Sachs ( GS) in September were the last two big, independent investment banks. But they applied to become commercial banks, meaning that they must follow the same capital restrictions that other banks do.

Mack said Morgan Stanley is looking to pay back the $10 billion it received from the U.S. government under the Troubled Asset Relief Program, Nikkei reports. The bank plans to pay back the funds "as soon as regulators are comfortable that there has been some extended period of stability."

Morgan Stanley also plans to expand its corporate services business in Japan via a joint venture with Japanese megabank Mitsubishi UFJ Financial ( MTU), according to the Japanese daily newspaper.