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Nomura, Daiwa pick up most graduates in four years

Bloomberg

Nomura Holdings Inc. and Daiwa Securities Group Inc. have hired more university graduates this spring than in the past four years, leading a resurgence in recruitment by Japanese brokerages as the outlook for the economy improves.

About 650 recruits joined Nomura’s domestic securities unit Monday, 6 percent more than last year, with most to be assigned to retail operations, said Kenji Yamashita, a spokesman for the nation’s largest brokerage.

Daiwa meanwhile boosted its intake by 50 percent to about 450, spokesman Hiroharu Misawa said.

Buoyed by the Tokyo Stock Exchange’s climb to a four-year high, investment banks are adding students fresh out of school to bolster retail operations even as they cut resources abroad.

“The hiring increase shows the worst is over and the business environment in banking is getting better,” said Katsunobu Komizo, president of Executive Search Partners Co., Japan’s biggest recruitment firm focusing on banks.

The country’s seven largest brokerages increased graduate recruitment by 6 percent to 2,150 in total this year, according to a compilation of company data.

The figures reflect broader job improvements for graduates, boding well for an economy in which unemployment among 15- to 24-year-olds was 6.6 percent in February, higher than the 4.3 percent for the entire workforce.

Mitsubishi UFJ Morgan Stanley Securities Co. increased graduate hiring to about 180 from 47 for the fiscal year that started Monday, said Hiroaki Konishi, a spokesman for the joint venture between Japan’s biggest bank and the Wall Street firm.

The nation’s other two huge banks recruited fewer graduates for their securities units. SMBC Nikko Securities Inc. hired about 300, compared with 386 a year ago, said spokesman Tadataka Ishida. Mizuho Securities Co. took on about 180, down from about 340, spokesman Mikihiko Kitano said.

Okasan Securities Co. boosted hiring by 15 percent to 230, while Tokai Tokyo Securities Co. recruited 160, a 10 percent increase, according to spokesmen at the brokerages.

Younger staff are attractive to investment banks because they cost less than older employees and can adapt to industry changes such as new rules introduced to reduce risk-taking since the 2008 collapse of Lehman Brothers Holdings Inc., according to Executive Search’s Komizo.

“They’re more capable of adjusting to new business models than senior bankers, who were successful with old models that were washed away after the Lehman shock,” Komizo said.

The retail brokerage business is also becoming more competitive with the growing popularity of online trading, he added.

Nomura’s retail assets rose to ¥80.3 trillion in February, the most since December 2007. About 45 percent of the firm’s securities profit before taxes came from domestic retail operations in the nine months ended December.

The resurgence in graduate recruitment is set to continue into 2014. Mitsubishi UFJ Morgan Stanley plans to double the number to 360 next year, and SMBC Nikko will boost hiring to 410, spokesmen said. Daiwa targets an increase to 500, and Mizuho, Okasan and Tokai Tokyo also plan to raise their intakes, according to their spokesmen.