Nomura Eyes China Expansion, Signs MoU with ICBC

Through the agreement, Nomura plans to explore opportunities to expand its business in the Chinese market.

Nomura Holdings, Inc., the largest brokerage in Japan, announced on Friday that it has signed a memorandum of understanding (MOU) with the Industrial and Commercial Bank of China Limited (ICBC). The aim of the agreement is to explore a potential business alliance.

A Chinese multinational banking company, ICBC is one of China’s “Big Four” state-owned commercial banks. Not only is it the largest bank in China, but it is also the largest bank in the world in terms of total assets, deposits, loans, number of customers and number of employees.

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Under the agreement, Nomura plans to explore opportunities to expand its business in the Chinese market. This will be achieved by collaborating with ICBC to offer financial services in the country. As a result of the MOU, Nomura expects that its presence and operations in China will grow over the medium to long-term.

Nomura Reports Sluggish Q2 Results

Nomura already has operations in China, with offices in both Beijing and Shanghai. However, last Wednesday Nomura reported a rare quarterly loss for its second quarter, as Finance Magnates reported.

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While the firm mainly chalks this off to a fine from the United States regarding transgressions prior to 2008, there is no denying that the firm’s domestic market has been weighing down the results.

Specifically, the appetite of Japanese traders is dwindling which dragged down results during the quarter. However, the rest of the firm’s Asia operations (excluding Japan) looked stronger, especially when looking at the firm’s wholesale operations.

During the second quarter, the unit was largely supported by an improvement in fixed income revenues in Asia (excluding Japan). This is primarily due to a return in market volatility, which saw an increase in client activity. Equities revenues also remained mostly unchanged on a quarter-on-quarter basis.

Although Nomura has not specified what type of financial services may result from the MOU, it’s no surprise that the Japanese brokerage giant is looking to increase its presence in China.

 

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