Nomura Holdings Inc is planning to increase its deal-related services for its corporate clients based in the United States, including arranging foreign exchange (forex) hedging, acquisition finance and more, the Chief Executive Officer of the Japanese firm told Reuters on Thursday.
At present, Nomura, which is the largest banking and brokerage group in Japan, is shifting its growth focus to the Americas and re-allocating its global resources to the region, which has the largest pool of investment banking fees in the world. According to the report, the firm is trying to scale up its businesses in the region without taking on larger risks.
Speaking to Reuters, Koji Nagai said: “Our key words are ‘America,’ ‘corporate clients’ and ‘solutions business.’”
At the moment, Nomura’s global markets business, which involves the trading of fixed income and equity, will not be expanded, despite the fact that it remains an important source of revenue for the firm.
How Will Zero-Fee Investment Platforms Impact Traditional Stock Brokers?Go to article >>
“Rather, our focus is on advisory and primary business, which are not subject to market risks to the same degree and do not use our balance sheet much,” he continued. “In addition, we will expand our solutions business such as acquisition finance and foreign currency exchange services for deals we advise on.”
Nomura expects $250 million revenue boost
As a result of the expansion, the CEO of Nomura forecasts a boost in revenue of $250 million in the medium term. This expected cash injection would be welcome news for the firm, which has reported three consecutive quarters of pre-tax loss in its overseas business through September.
In addition, as Finance Magnates reported, during the six months to September, which is the first half of the company’s fiscal year ending March 31, 2019, Nomura reported net revenue of ¥554.9 billion ($5 billion).
When measured against the same period last year, this was down by 22 percent. Income before income taxes was also down on a year-on-year basis, falling by 91 percent to reach ¥14.1 billion ($127.2 million).
“We will absolutely keep our global platform though we have been shrinking businesses that are unprofitable and not needed by our clients,” Nagai added.