It was supposed to be a smooth transition for Nomura Holdings Inc.’s new boss. Then the coronavirus struck.

Thanks to the pandemic, Kentaro Okuda, 56, takes the reins of Japan’s biggest brokerage on Wednesday with the prospect of deals drying up as bankers keep away from clients, and companies retreating in the face of an impending recession. Increased stock trading is a silver lining, though one unlikely to diminish the challenge of turning around the retail business at home.

This latter piece will demand Okuda’s attention as he takes forward a sweeping overhaul of Nomura even with the outbreak creating fresh challenges. Predecessor Koji Nagai, 61, had already engineered a fledgling recovery overseas, but much still remains to be done to cement a restructuring that centers on building more stable earnings from advising corporate clients.

“Okuda is coming in right in the middle of a crisis so I think it will be tough,” said Michael Makdad, an analyst at Morningstar Inc. in Tokyo. “There should be a sharp negative impact on the 2020 earnings of Nomura and its competitors.”

Nagai, who will become chairman, made some early progress with his plan announced last April to cut $1 billion (about ¥108 billion) of costs from the global wholesale division and reduce branches at home. He was aided by a surge in offshore bond trading revenues.

Investors welcomed the reboot, which helped Tokyo-based Nomura return to profit in the nine months to December following its first annual loss in a decade. Yet after rallying about 50 percent in the second half of 2019, shares have slid 16 percent this year amid the global virus-fueled rout.

Okuda will have many opportunities to live his motto of “get out of your comfort zone” as he tries to maintain day-to-day business continuity while completing Nagai’s restructuring plan and overseeing the firm’s expansion in China.

One of his first acts in charge will be to address hundreds of new recruits — a long-standing annual tradition in corporate Japan — except he’ll do it via the company’s intranet to ensure social distancing. Like its global competitors, Nomura has split operations, allowed work from home and restricted travel to minimize the impact of COVID-19, which has now claimed more than 20,000 lives worldwide.

Okuda’s experience in mergers and acquisitions during the global financial meltdown of 2008 and his oversight of investment banking after, will have him in good stead as he navigates the current crisis, according to Hideyasu Ban, an analyst at Jefferies in Tokyo. The situation may be an opportunity to “speed up the pace of transformation,” he said.

The brokerage will continue to “firmly” implement its overhaul plan, spokesman Kenji Yamashita said, declining to comment on the impact of the virus outbreak.

Since joining Nomura fresh out of Keio University in 1987, Okuda has spent most of his career working with companies, advising on mergers and pitching fund raising ideas. The first CEO in decades to come predominantly from the wholesale business, he’s also distinct in the international experience he’s accumulated, first during an MBA at the Wharton School and more recently as head of the Americas.

“Okuda’s strength is that he has a sense of balance and an ability to put together deals” for companies, said Hiroshi Toda, who was Nomura’s deputy president from 2003 to 2008. For the modern brokerage business, markets and investment banking are both key, he said.

Those who have worked with Okuda over the years say he has an eye for a good deal and is decisive, without ruffling feathers. In an industry known for muscle-flexing, he is a calm thinker who rarely raises his voice, according to two former colleagues who asked to speak anonymously. One remembers him smoothing over the clashes between bankers that arose after the disastrous acquisition of Lehman Brothers Holdings Inc. businesses in 2008.

“He listens closely to others,” said Hironari Nozaki, a Toyo University professor, who specializes in finance and went to the same schools as Okuda from elementary level to college. A life-long soccer fan, Okuda is a team player unafraid to seek diverse opinions, he said. “He’s like a European-style soccer player who values teamwork, rather than a Brazilian-style player focusing on individual skills.”

Okuda’s most daunting task will be on home ground, revamping the costly retail franchise, which relies on an aging client base and faces intensifying price competition from online rivals. A further reduction in branches and staff risks a backlash from the unit, which till recently was a stabilizing force as the offshore business floundered in the wake of the Lehman acquisition in Europe and Asia.

“Veteran retail salesmen might think, ‘Is this what we get after the overseas team caused us so much trouble?”‘ said Nozaki, a former Citigroup Inc. analyst. Still, he added, the fact that “Okuda isn’t too attached to the retail department means he may find it relatively easy to overhaul it.”

Nomura posted a rare annual loss in the year ended March 2019 partly because of an ¥81.4 billion goodwill writedown related to overseas deals including the Lehman acquisition, which cast a shadow over Nagai’s almost eight-year reign.

That’s not to say Okuda’s focus will only be domestic. A day after his appointment was announced, Nomura outlined ambitious plans for China where it aims to build its operation serving wealthy clients though a local joint venture. Headcount there is expected to climb to 500 by 2023 as Nomura expands into investment banking as well.

“Many people at Japanese brokerages tend to talk only from the context of the local market, but he’s different,” said Yuji Kimura, CEO of private equity firm Polaris Capital Group Co., who has worked with Okuda on various deals. “He always puts things in global perspective.”

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