Bloomberg News

Nomura Said to Focus on Fewer Industries Amid Europe Job Cuts

September 05, 2012

Nomura Said to Focus on Fewer Industries in Planned Europe Cuts

Koji Nagai, chief executive officer of Nomura Holdings Inc., is scaling back after the Tokyo-based bank’s non- Japanese business reported nine consecutive quarterly losses. Photographer: Tomohiro Ohsumi/Bloomberg

Nomura Holdings Inc. will start cutting jobs in Europe this month as it pares ambitions to be a full-service, global investment bank and takes a narrower focus on four or five industries in the region, according to three people with knowledge of the situation.

The reductions will fall most heavily in equity sales and trading and in investment banking, said the people, who asked not to be identified ahead of an announcement today. Around 200 jobs could be cut in equities, including about 12 managing directors, one of the people said. No final decisions on job cuts have been made, the three people said.

The European investment-banking division, which advises companies on mergers and underwrites share and bond issues, will be shrunk to focus on financial services, natural resources, industrial companies and private equity, two people said. The fixed-income unit will remain largely intact, all three said.

The move marks a retreat in the Japanese bank’s four-year struggle to build a presence in the region which began with the 2008 purchase of Lehman Brothers Holdings Inc.’s European arm. Koji Nagai, 53, who took over as chief executive officer from Kenichi Watanabe last month following an insider-trading scandal, is scaling back after the Tokyo-based bank’s non- Japanese business reported nine consecutive quarterly losses.

The brokerage employed 3,975 people in Europe and 2,423 in the Americas, mostly in New York, among its 35,063 staff globally at the end of June. Officials at the bank declined to comment.

Japan Refocus

The firm will refocus on domestic markets and cut spending overseas by around $1 billion by 2014, Nagai said on Aug. 31. That follows $1.2 billion in cost cuts last year.

William Vereker, the former Lehman banker who jointly ran the investment bank globally, was made vice-chairman of the business this week, leaving Kentaro Okuda as the unit’s sole leader. James DeNaut and Charles Pitts-Tucker were named joint international heads of investment banking, reporting to Okuda.

Watanabe, 59, and former Chief Operating Officer Takumi Shibata, architects of the Lehman purchase, stepped down in July after Japan’s financial regulator found that employees leaked information on share sales managed by the company.

Shares of Nomura, which touched a 37-year low in November, have gained about 12 percent this year, compared with the Nikkei 225 Index’s 2.7 percent advance.

To contact the reporters on this story: Liam Vaughan in London at lvaughan6@bloomberg.net; Zijing Wu in London at zwu17@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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