Nomura Eliminates Equity Jobs Overseas as Revamp Looms, Sources Say
Firm is cutting bulk of Singapore equity research, people say.
(Bloomberg) -- Nomura Holdings Inc. has begun eliminating equity jobs overseas, people familiar with the matter said, hours before the Japanese brokerage is set to unveil a business revival plan.
Japan’s largest securities firm is slashing the bulk of its equities research operation in Singapore, according to the people, who asked not to be identified because the cuts aren’t public yet. Eight out of nine employees on the team have been let go, the people said.
The Tokyo-based firm has for years been grappling with how to calibrate its ambitions overseas as a sluggish economy dims prospects at home. Under Chief Executive Officer Koji Nagai, Nomura has been losing money abroad while revenue at its mainstay domestic retail business has dropped for four straight quarters.
Nagai, 60, is scheduled to unveil his latest strategy to investors in Tokyo later Thursday. Nomura plans to cut dozens of trading and investment-banking jobs in Europe and the U.S., people familiar with the matter said last week. It aims to cut a fifth of its branches and combine back-office functions, the Nikkei newspaper reported.
Nagai commissioned the review in January after the bank posted its biggest quarterly loss since the global financial crisis, thanks partly to a goodwill writedown on its 2008 acquisition of Lehman Brothers Holdings Inc. assets -- the deal that hobbled the bank’s European operations.
Credit rating companies have been keenly anticipating Nomura’s latest revival attempt. S&P Global Ratings said in February that it may consider reviewing the firm’s debt ratings if its restructuring efforts are unsuccessful and earnings power remains weak. Moody’s Investors Service said in November that it may downgrade the rating if the bank can’t improve profitability without adding risk to its balance sheet.
Shares of Nomura fell 1.4 percent at 2:37 p.m. in Tokyo, erasing its gains for this year and underperforming the benchmark Topix index, which has climbed about 8 percent.
What Bloomberg Opinion Says
“Nomura needs a presence outside Japan, just a smaller one. A bare-bones operation in Europe, where Wall Street rivals reign in investment banking, would be a start.”
--Nisha Gopalan, columnist
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Nomura has 300 research specialists worldwide covering politics, economics, foreign exchange, interest rates, equities, credit and quantitative strategies, according to its website.
The bank plans to close around 20 percent of its 156 domestic retail branches, the Nikkei newspaper said. It will shut or merge more than 30 outlets mostly in the Tokyo area over the next few years, according to the report.
It will also streamline its 11 back-office departments into about half that number, and revisit its policy of maintaining hubs in Japan, the U.S. and Europe, the Nikkei said. Nomura’s 11 corporate divisions span areas from finance and human resources to risk management.
A Nomura spokesman declined to comment on the Singapore cuts. The firm also said it wasn’t the source of the Nikkei report.
Nomura has already been trimming branches in recent years, shedding 22 between March 2012 and September 2018. It will reduce expenses at its retail division by 10 percent over the next three years, according to a December presentation.
--With assistance from Takashi Nakamichi and Takako Taniguchi.
To contact the reporters on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net;Abhishek Vishnoi in Singapore at avishnoi4@bloomberg.net
To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Russell Ward
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