Japan’s biggest brokerage, Nomura Holdings Inc, announced today that it has slipped into its first quarterly net loss since 2011 as its wholesale division fell into the red, its retail division weakened and its overseas operations lost money for the sixth year in a row.
Just two weeks after warning it would cut some overseas jobs and operations, data provided by Reuters revealed that Nomura recorded a fourth-quarter net loss of 19.2 billion yen ($173 million), compared with a net profit of 82.0 billion yen a year earlier. The loss included a 16 billion yen charge for redundancy packages.
The cutbacks announced this month provide a fair indication that Nomura’s latest attempts to become a global player have run into problems. After accumulating $3.5 billion in losses overseas in six years, Nomura decided to axe a brokerage unit and hundreds of jobs in Europe and the Americas.
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The weak January-March quarter saw Nomura’s full-year net profit fall to 131.6 billion yen, 41 percent below the previous 224.8 billion yen – its best annual result for nine years.
According to Nomura, its global markets business, part of its wholesale division, was impacted by widening spreads and market disruption following the introduction of negative interest rates by the Bank of Japan earlier this year. Its overseas operations posted an annual loss of 79.6 billion yen while the wholesale division reportedly lost 22.8 billion yen between January and March.
Annual pretax profit at Nomura’s retail division fell 21 percent compared to last year. In January to March alone, retail profit fell by 70 percent year-on-year to 12.2 billion yen, as market volatility resulted in sluggish investor activity.
The company has announced separate plans to spend up to 20 billion yen buying back its shares.