Regional banks need to stop their fixation with the old-fashioned buy-and-hold strategy and be more nimble to make the most of their investments, a three-decade industry veteran says.
The current low interest-rate environment calls for lenders to adopt a trading mentality and look to lock-in capital gains when they can, instead of focusing on long-term valuations or fixed targets, said Naoto Oguri, who spent about 35 years at Shizuoka Bank, most of them in the markets' division. He left the regional lender in 2015 to set up an advisory firm the following year.
"The biggest problem at Japanese banks is their fixation with unrealized losses or gains," said Oguri, now president at Nagomi Capital Co. in Tokyo, in a recent interview. "They should aim to lock-in profits and sell when it gets risky. There is no profit until you sell."