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Nomura Holdings Cutting Up to 500 Jobs in Europe
Apr 12, 2016 | The Wall Street Journal
By Philip Georgiadis and Tim Burke
Nomura Holdings Inc. is cutting up to 500 jobs in Europe and about 10% of its Americas workforce, scaling back an ambitious international expansion that began when it bought parts of Lehman Brothers almost eight years ago. -
How Nomura’s angel fell to earth
Apr 12, 2016 | Financial Times
By Jonathan Guthrie
Takumi Shibata, the pera-loving international boss, envisaged Nomura winging into the top flight of international investment banking after buying Lehman Brothers’ European and Asian operations in 2008. Instead there is a definite whiff of hubris and burnt feathers as the Japanese broker retrenches yet again. -
Hundreds of jobs at risk in Nomura pullback
Apr 13, 2016 | Financial Times
...The move is yet another setback in Nomura’s campaign to reach the highest rung of global investment banks — an effort supposedly boosted by the 2008 purchase of the Asian and European operations of Lehman Brothers, writes Leo Lewis. -
Nomura to Shrink Its European and Americas Businesses
Apr 12, 2016 | The New York Times
By Chad Bray
...The moves are the latest retrenchment by Nomura, nearly eight years after it agreed to buy the international businesses of the American investment bank Lehman Brothers, which filed for bankruptcy in 2008, during the financial crisis. -
Nomura Said to Retrench in Equities as Nagai Drops Expansion
Apr 12, 2016 | Bloomberg - Video
By Takahiko Hyuga
...“The greater trend here is that banks are consolidating back to their home markets where they are stronger and have greater presence,” said Jonathan Chng, a senior analyst at East & Partners in Singapore. “Post Lehman crisis, banks expanded their operations like wildfire. Now, amidst increasing stringent regulations on the finance industry, they need to plan carefully their next step.” -
Nomura to cut 500-600 staff in European equities cull
Apr 12, 2016 | Reuters
...The retreat broadly reflects the problems banks outside the top five continue to have in attaining the scale necessary to be profitable, and Nomura's failed attempt to crack into the top tier despite its acquisition of the European and Asian businesses of Lehman Brothers in 2008. -
Comment: With blockchain, regulators should first do no harm
Apr 12, 2016 | Financial Times
By J. Christopher Giancarlo
...I remember a call from a US bank regulator asking about trading exposure in CDS of several major banks and brokers, including Lehman Brothers.
Client Attorney Privileged/Attorney Work Product/At Request of Counsel
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Nomura Holdings Cutting Up to 500 Jobs in Europe
Apr 12, 2016 | The Wall Street Journal
By Philip Georgiadis and Tim Burke
Nomura Holdings Inc. is cutting up to 500 jobs in Europe and about 10% of its Americas workforce, scaling back an ambitious international expansion that began when it bought parts of Lehman Brothers almost eight years ago.
The Japanese bank blamed “extreme” market volatility and a decline in liquidity as it announced a “strategic reassessment” of its international business. This will result in the loss of up to 500 jobs—or 10% to 15% of head count—across its EMEA equities business, according to people familiar with the plans.
Equity research, underwriting and derivatives businesses will be affected by the cuts. The bank will still have a London and EMEA equities business.
After the cuts, Nomura’s equities business in EMEA will have between 200 and 250 staff, according to one person.
The bank began to tell staff on Tuesday that their jobs were at risk, with some staff leaving the building immediately, according to one person familiar with the plans.
Around 10% of the Americas workforce is also likely to be laid off, said another person, but the bank doesn’t plan to exit any businesses there. Cuts in the Americas will fall hardest in equity capital markets, equity research and securitized products, the person said.trenchmentENLARGENomura Holdings is cutting up to 500 jobs in Europe and about 10% of its Americas workforce.PHOTO: EUROPEAN PRESSPHOTO AGENCYBy PHILIP GEORGIADIS and TIM BURKEUpdated April 12, 2016 4:02 p.m. ET0 COMMENTS
Nomura Holdings Inc. is cutting up to 500 jobs in Europe and about 10% of its Americas workforce, scaling back an ambitious international expansion that began when it bought parts of Lehman Brothers almost eight years ago.
The Japanese bank blamed “extreme” market volatility and a decline in liquidity as it announced a “strategic reassessment” of its international business. This will result in the loss of up to 500 jobs—or 10% to 15% of head count—across its EMEA equities business, according to people familiar with the plans.PREVIOUSLY
Nomura to Cut Jobs in Americas and EuropeNomura Holdings Profit Takes Hit From Market Tumult
Equity research, underwriting and derivatives businesses will be affected by the cuts. The bank will still have a London and EMEA equities business.
After the cuts, Nomura’s equities business in EMEA will have between 200 and 250 staff, according to one person.Advertisement
The bank began to tell staff on Tuesday that their jobs were at risk, with some staff leaving the building immediately, according to one person familiar with the plans.
Around 10% of the Americas workforce is also likely to be laid off, said another person, but the bank doesn’t plan to exit any businesses there. Cuts in the Americas will fall hardest in equity capital markets, equity research and securitized products, the person said.
Nomura employed 2,501 people in the U.S. and 3,433 in Europe as of Dec. 31. It employs 16,282 in Japan.
The cuts are the latest retrenchment to the bank’s international expansion since it acquired the Lehman Brothers’ investment-banking franchise in Asia-Pacific and Europe in 2008, bringing aboard 8,000 former Lehman employees.
The expansion was an opportunity for Nomura to compete as a global investment bank. It also sharply increased the bank’s fixed costs.
For full story: http://www.wsj.com/articles/nomura-holdings-cutting-up-to-500-jobs-in-europe-1460475148?mg=id-wsj
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How Nomura’s angel fell to earth
Apr 12, 2016 | Financial Times
By Jonathan Guthrie
Nomura bankers visiting from Tokyo are wont to ask London colleagues: “How come you have such swanky offices when you lose us money?” There will soon be fewer at One Angel Lane to aim that barb at. Nomura is to cut hundreds of jobs across Europe and the US, with its City outpost bearing the brunt.
Takumi Shibata, the pera-loving international boss, envisaged Nomura winging into the top flight of international investment banking after buying Lehman Brothers’ European and Asian operations in 2008. Instead there is a definite whiff of hubris and burnt feathers as the Japanese broker retrenches yet again.
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Some commentators will trot out a narrative of business failure based on cultural incompatibility. But this factor is relatively low in the mix. Nomura’s European arm was, in the years following the Lehman deal, not badly managed by the dysfunctional standards of investment banking.
Instead, Mr Shibata, a wisecracking banker well-liked by western counterparts, made a bad strategic call in absorbing Lehman’s international division. The price was only $225m. But the business came with heavy fixed costs, of which One Angel Lane, opened by George Osborne in 2011, became emblematic, despite its modest rent.
Mr Shibata was ousted as chief operating officer just a year later as losses mounted. He had sold the Lehman deal to the board on the basis that a slew of US and European banks would fail. Instead, governments saved them with direct bailouts and indirectly through the quantitative easing that boosted their trading arms. Ironically, Nomura lost bond and derivative business to some of these prodigals because their credit ratings were stronger.
For full story: http://www.ft.com/intl/cms/s/0/8adfdf0c-0099-11e6-99cb-83242733f755.html#axzz45g4qebjq
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Hundreds of jobs at risk in Nomura pullback
Apr 13, 2016 | Financial Times
Nomura is to close its European equity research division, and cut hundreds of jobs in the UK and US, people familiar with the matter said, as Japan’s largest brokerage struggles to turn a profit from its international operations.
The move is yet another setback in Nomura’s campaign to reach the highest rung of global investment banks — an effort supposedly boosted by the 2008 purchase of the Asian and European operations of Lehman Brothers, writes Leo Lewis.A series of tactical blunders and an insider trading scandal in 2012 have battered the firm’s resolve. In the years since the Lehman deal, Nomura has been forced into cost-cuts amounting to more than $2bn and a series of painful readjustments that have seen most traces of the former Lehman business wiped away...
For full story: http://www.ft.com/fastft/2016/04/12/hundreds-of-jobs-at-risk-in-nomura-pullback/
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Nomura to Shrink Its European and Americas Businesses
Apr 12, 2016 | The New York Times
By Chad Bray
Nomura said on Tuesday that it planned to close several parts of its business in Europe and to shrink its operations in the Americas, as the financial firm looks to reduce costs and improve the profitability of its operations outside its home market, Japan.
The moves are the latest retrenchment by Nomura, nearly eight years after itagreed to buy the international businesses of the American investment bankLehman Brothers, which filed for bankruptcy in 2008, during the financial crisis.
Nomura had hoped at the time to become a larger global financial player. But four years ago, it announced $1 billion in cost cuts as it tempered those ambitions.
The latest changes are expected to include job cuts in Europe and the United States, but it is unclear how many. Nomura employs about 3,500 people in its European business, the bulk of which are in London, and about 2,500 in the Americas.
Nomura is expected to provide more details on April 27, when it will also announce its results for its 2015 fiscal year...
For full story: http://www.nytimes.com/2016/04/13/business/dealbook/nomura-europe-americas.html
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Nomura Said to Retrench in Equities as Nagai Drops Expansion
Apr 12, 2016 | Bloomberg - Video
By Takahiko Hyuga
As recently as December, Nomura Holdings Inc. Chief Executive Officer Koji Nagai was making acquisitions and talking about hiring senior bankers in the U.S. Then came a first quarter investment banks will want to forget about.
As markets gyrated and negative interest rates crimped earnings, Nagai was forced to reverse course sharply. Nomura, Japan’s largest securities firm, is largely exiting European equity operations, a move that combined with reductions in North America could affect about 1,000 jobs, people with knowledge of the matter said on Tuesday.
Nagai’s U-turn follows years of stop-start expansions
abroad by Nomura and shows just how much pain rocky markets and stricter regulations have heaped on investment banks. Companies from Credit Suisse Group AG to Barclays Plc are cutting jobs or exiting some areas outright as the need to preserve capital forces CEOs to re-examine which businesses they can remain in.
“The greater trend here is that banks are consolidating back to their home markets where they are stronger and have greater presence,” said Jonathan Chng, a senior analyst at East & Partners in Singapore. “Post Lehman crisis, banks expanded their operations like wildfire. Now, amidst increasing stringent regulations on the finance industry, they need to plan carefully their next step.”...
...Nagai’s retrenchment comes almost eight years after Nomura bought Lehman Brothers Holdings Inc.’s operations in Europe and Asia. The bank’s European unit has been the biggest loss-maker since the company last eked out a pretax profit abroad, in 2010...
For full story and video: http://www.bloomberg.com/news/articles/2016-04-12/nomura-said-to-exit-europe-equities-as-nagai-reverses-expansion
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Nomura to cut 500-600 staff in European equities cull
Apr 12, 2016 | Reuters
Nomura plans to axe 500-600 staff in Europe and will also cut global markets staff in the US, people familiar with the matter said on Tuesday, as Japan's biggest brokerage tries to stem years of heavy overseas losses.
The European cuts will be in equity research, flow and structured equity derivatives and equity capital markets underwriting, all of which the firm is exiting. These businesses had remained under the Nomura umbrella in 2012 when cash equities execution was shifted to Instinet, its electronic agency broker. Nomura will, however, retain its convertibles business as well as an ECM advisory team.
The latest cuts will exclude Instinet. In fact, Nomura is likely to re-allocate some of the capital freed up from its European exits and its US rationalisation to shift some agency fixed-income execution via Instinet.
The cuts in Europe are estimated to account for about 15% of staff in Europe, although more precise numbers will be announced at the firm's investor day on April 27.
Nomura had already cut hundreds of staff in its European and US equities business in 2012 when equities and fixed income were merged to reform the global markets division, in an attempt to cut costs and improve profitability.
Beyond equities, Nomura has also been shrinking its international spread products businesses as it de-emphasises product lines, such as corporate credit and non-agency US RMBS in global markets. Areas such as international debt capital markets will, however, be untouched by the changes.
Nomura's overseas business is set to report a sixth straight annual pre-tax loss for the year ended March 2016. Between October-December 2015 alone, the overseas business lost ¥19.9bn (US$173m).
"Since the second half of last year, global markets have experienced extreme volatility and a significant decline in liquidity, triggered by heightened uncertainty in the global economy," Nomura said in a statement confirming it will cut jobs in Europe and the US, but without giving details.
"Today's announcement will position Nomura for sustainable profitability under the new market and regulatory environment, and reaffirms Nomura's commitment to improving the performance of its international businesses," Nomura said.
The combination of a hostile equity environment in which institutional clients have reduced trading velocity and regulatory developments (most notably MiFID II) has made it tough for brokers lacking scale to make a positive return on their equity businesses.
The decision to shutter European equity research and derivatives reflects the difficult underlying environment, the people said.
The retreat broadly reflects the problems banks outside the top five continue to have in attaining the scale necessary to be profitable, and Nomura's failed attempt to crack into the top tier despite its acquisition of the European and Asian businesses of Lehman Brothers in 2008.
Nomura's move comes as other big institutions also scale back in international cash equities due to sluggish trading volumes and rising costs against a backdrop of jitters about the global economy. British lender Barclays closed its cash equities business in Asia, while Asia-focused Standard Chartered closed its equities franchise...
For full story: http://www.reuters.com/article/nomura-hldgs-cuts-idUSL5N17F2G8
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Comment: With blockchain, regulators should first do no harm
Apr 12, 2016 | Financial Times
By J. Christopher Giancarlo
H
September 2008 was a perilous time in global financial markets. I was a senior executive of one of the world’s major trading platforms for credit default swaps (CDS), then the focus of systemic risk.I remember a call from a US bank regulator asking about trading exposure in CDS of several major banks and brokers, including Lehman Brothers.
Trading conditions were deteriorating by the minute. It was clear that the regulator had little means, short of telephone calls, to read all the danger signals the markets was broadcasting.
Unfortunately seven-and-a-half years later and global regulators still do not have full visibility into the swaps trading portfolios of major institutions.
One of the key reforms agreed upon following the crisis was the reporting of swaps transactions to regulators and central data repositories. My agency, the US Commodity Futures Trading Commission (CFTC), started that initiative in 2011 and has pursued it ever since.
Yet CFTC data still do not provide a complete picture of global swaps trading. In part, that is because global regulators have not harmonised global reporting protocols and data fields across international jurisdictions.
It is also because of the practical impossibility of a single national regulator collecting sufficient quality data to recreate a real-time ledger of the highly complex, global trading portfolios of all market participants.
Fortunately, emerging distributed ledger technology (DLT), or “blockchain”, may address this crucial need. The Bank of England has called DLT the “first attempt at an ‘internet of finance’”.
It has the potential to link legal recordkeeping the same way the internet connects networks of data and information. It could increase settlement efficiency and speed, reducing transaction costs and broadening market access.
Importantly, DLT could provide regulators with access to a “golden record” of the real-time ledgers of all regulated trading participants, rather than piecemeal data belatedly gathered to recreate complex, individual trading portfolios.
In 2008, prudential regulators had to call around brokerage firms like mine searching for market confirmation of Lehman’s distress. If, however, they had access to a DLT golden record, they may have recognised anomalies in market-wide trade activity and divergence in counterparty exposures on a near or real-time basis.
The blockchain could have allowed for far prompter, better-informed and more calibrated regulatory intervention instead of the disorganised response that unfortunately ensued.
Had Lehman still failed, records powered by DLT and held by trading counterparties (and available to regulators) would have accurately shown Lehman’s open positions across asset classes.
Imagine if, instead of requiring countless legal actions spanning eight years, we could have known all of Lehman’s exposures within minutes of its bankruptcy filing. Accelerated settlement of open positions and accounts could have taken weeks, not years.
Not surprisingly, millions are being invested today in new DLT ventures and innovations. Development is moving rapidly, certainly faster than underlying legal and regulatory frameworks. DLT is still in its infancy, with many hurdles to cross for it to reach its full potential. Yet, if it succeeds, it may face the danger of regulation from a dozen different directions with disparate restrictions stifling crucial technological development and implementation.
For full story: http://www.ft.com/intl/cms/s/0/8090cc80-fff6-11e5-99cb-83242733f755.html#axzz45g4qebjq
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