Nomura's retreat from wholesale banking
A bridge to nowhere
When Nomura pounced on the Asian and European business of
Lehman Brothers, after the American bank’s bankruptcy in
September 2008, it trumpeted a "once-in-a-generation"
opportunity to beef up its global wholesale franchise. The Japanese
bank took to calling itself a bridge between Asia and the rest of the
world. Ex-Lehmanites swallowed their misgivings and changed their
business cards, helped along by lavish pay guarantees.
Nomura claims not to have given up on its global ambitions, but it
has certainly scaled them back. Koji Nagai, its new chief executive,
unveiled details today of another $1 billion in cost cuts to the
investment bank, to add to cost reductions of $1 billion that have
already taken place. Almost half of the new cuts will fall in Europe,
as the bank shifts its positioning to play up its strengths in Asia and
to focus on fewer areas of strength; that will mean a slimming regime
in its investment-banking and equities arms in particular.
Nomura’s difficulties are not restricted to Europe: Mr Nagai’s
elevation came about because of an insider-trading scandal in
Japan. But its pretensions to be a global titan have cost it dear. The
wholesale bank has been losing money consistently: it booked
another pretax loss in the first quarter of the fiscal year, despite the
first cost-cutting blitz. Few of the senior Lehman staff that Nomura
paid up so generously to acquire remain with the bank.(つづく)
http://www.economist.com/blogs/schumpeter/2012/09/nomuras-retreat-wholesale-banking?fsrc=scn/tw/te/bl/abridgetonowhere