No­mura said to plan cutting about 20pc of North Amer­ica staff

The Pak Banker - - COMPANIES/BOSS -

No­mura Hold­ings Inc. may dis­miss about 20 per­cent of its work­force in North Amer­ica, ac­cord­ing to peo­ple with knowl­edge of the situation, join­ing a grow­ing num­ber of com­peti­tors shrink­ing Wall Street op­er­a­tions amid a trad­ing slump.

De­ci­sions aren't fi­nal, and the ul­ti­mate num­ber could still dif­fer, said the peo­ple, who asked not to be iden­ti­fied dis­cussing in­ter­nal de­lib­er­a­tions. One se­nior man­ager said re­duc­tions could be ex­panded to af­fect as much as 30 per­cent of the re­gion's staff. Ja­pan's big­gest bro­ker­age has about 2,500 em­ploy­ees in the Amer­i­cas, most of whom work in the U.S. and Canada.

Jen­nifer Will, a com­pany spokes­woman in New York, de­clined to com­ment. Fir­ings in the U.S. would sig­nal a re­ver­sal for Chief Ex­ec­u­tive Of­fi­cer Koji Na­gai, who said as re­cently as De­cem­ber that the Tokyo-based bank has room to add em­ploy­ees in the Amer­i­cas even af­ter los­ing money there. Mar­ket swings, low in­ter­est rates and slump­ing com­modi­ties prices al­ready are spurring ri­val firms to warn share­hold­ers about an­other drop in rev­enue from trad­ing and deal­mak­ing this quar­ter. The chal­lenges also have been spurring more job cuts at com­pa­nies in­clud­ing Credit Suisse Group AG, Bank of Amer­ica Corp. and Gold­man Sachs Group Inc. Shares of No­mura rose 0.3 per­cent at 9:29 a.m. in Tokyo on Fri­day. The stock has dropped about 25 per­cent in 2016, head­ing for a third year of de­clines.

No­mura has gone through a se­ries of ex­pan­sions and con­trac­tions out­side of Ja­pan over the years. It bought bank­rupt Lehman Brothers Hold­ings Inc.'s Euro­pean and Asian op­er­a­tions in 2008, only to pare back op­er­a­tions in the re­gions later, af­ter costs and losses swelled.

In the Amer­i­cas, No­mura has posted pre­tax losses for six straight quar­ters. Na­gai, 57, aban­doned a goal to earn 50 bil­lion yen ($443 mil­lion) in profit abroad for the year end­ing March af­ter the com­pany lost 63 bil­lion yen overseas be­fore taxes in the first nine months. No­mura last made an an­nual profit out­side of Ja­pan in the year ended March 2010.

Global in­vest­ment banks are deep­en­ing staff re­duc­tions as the trad­ing slump and stricter reg­u­la­tions cur­tail profitabil­ity. Credit Suisse an­nounced 2,000 ad­di­tional job cuts on Wed­nes­day, with CEO Tid­jane Thiam say­ing the Swiss bank may post a net loss this quar­ter. Gold­man Sachs and Bank of Amer­ica, two of the largest U.S.based in­vest­ment banks, have been lean­ing on an­nual dis­missals of low per­form­ers to shrink parts of their Wall Street op­er­a­tions, peo­ple familiar with the plans have said.

Na­gai, who be­came CEO in Au­gust 2012, has grown more bear­ish about prospects for the com­pany's overseas busi­ness in re­cent months. The firm will cut costs overseas by trim­ming jobs and shrink­ing un­pro­duc­tive op­er­a­tions, he said in an in­ter­view in Fe­bru­ary. Global mar­ket tur­moil has af­fected overseas whole­sale busi­ness and made it dif­fi­cult to pre­dict when the com­pany could re­turn to profit abroad, he said. As re­cently as De­cem­ber, Na­gai said there was "still po­ten­tial for growth in the Amer­i­cas" and that the firm is seek­ing to dou­ble in­vest­ment-bank­ing rev­enue there over the next two to three years. No­mura, which has been re­ly­ing on do­mes­tic op­er­a­tions for profit, also faces tougher busi­ness con­di­tions at home, where in­vestors are los­ing en­thu­si­asm for Prime Min­is­ter Shinzo Abe's eco­nomic stim­u­lus poli­cies. Net in­come is ex­pected to fall 19 per­cent to 183.2 bil­lion yen in the year end­ing March 31, ac­cord­ing to the av­er­age es­ti­mate of an­a­lysts sur­veyed by Bloomberg.

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