Nomura Holdings Inc. aims to derive almost half a billion dollars in planned savings from Europe, where it lost the most money last year, as the brokerage scales back its global ambitions
Nomura will pare about $450 million in costs in Europe and the Middle East, $210 million in the Americas and $340 million in Asia, including Japan, Nomura said in a presentation to investors in Tokyo on Thursday.
About half of the cost cuts worldwide will be from trimming payrolls, with the rest coming from merging some operations, curtailing rental expenses and reducing investment in information technology, sources said.
In Europe, Nomura will cut jobs for managing directors and back-office staff, two sources with direct knowledge of the matter said. The brokerage will expand its fixed-income business globally and re-assign people from other divisions to join the unit, the sources said.
“There was a consensus that the cuts would center on Europe, but they’re smaller than we expected. It’s good to see the plans for substantial reductions in Asia as the region has been generating losses,” said Takehito Yamanaka, an analyst at Credit Suisse Group AG in Tokyo. “Curtailing the job cuts and reducing operational costs instead eases concern about revenue dropping.”
Europe accounted for about 20 percent of Nomura’s total costs for the year that ended March 31, while the U.S. represented another 12 percent, financial statements show. Excluding Japan, Asia accounted for 3.3 percent.
The changes mark a retreat in the bank’s four-year struggle to build a presence in the region, beginning with the 2008 purchase of Lehman Brothers Holdings Inc.’s European arm. Nagai, 53, who took over as CEO from Kenichi Watanabe last month because of an insider-trading scandal, is scaling back after the bank’s foreign operations reported nine consecutive quarterly losses.
Nomura will begin eliminating 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, three sources said earlier. The cuts in the region will fall most heavily in equity sales and trading and in investment banking.