Nomura Hong Kong Shakes Up: In a strategic move, Japanese investment bank Nomura Holdings has quietly made some significant changes to its Hong Kong-based investment banking team. Approximately 10 bankers, spanning various roles from junior staff to senior positions, including managing directors and executive directors, have seen their tenure with Nomura come to an end.
The cuts were reportedly announced recently, but the sources disclosing this information opted to remain anonymous due to the confidential nature of the matter. Nomura itself has chosen not to comment on these developments when reached out to by analyst.
The Japanese investment bank has been facing headwinds in its China-related business endeavors. One clear indication of this is the notable decline in merger and acquisition (M&A) fee revenue over the first three quarters of 2023.
Specifically, the revenue in question fell by a significant 40.4%, amounting to $68.8 million, taking into account the Asia Pacific region, which includes Japan. This data was sourced from LSEG, a trusted financial data provider. Furthermore, it’s worth noting that during the first nine months of this year, Nomura failed to secure a spot on the list of the top 25 advisors for China-related buyout deals as compiled by LSEG.
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While Nomura may have encountered challenges in certain areas of its Asia operations, there have been bright spots as well. Notably, the bank made a significant impact in regional equity capital markets, partly thanks to its prominent advisory role in a substantial $9.24-billion stake sale transaction. This deal pertained to Japan Post Holdings and its stake sale in Japan Post Bank, a high-profile transaction that unfolded in March.
Not just Nomura faces financial sector issues. Top US and European banks like Goldman Sachs, Bank of America, Citigroup, and UBS have begun investment banking layoffs this year. These cuts are intended to alleviate many problems that have made the sector more difficult. These include higher interest rates, a slower Chinese economic recovery, and Beijing’s intensified regulatory monitoring.
One striking data point supporting these challenges is the notable decline in total deal making activity involving China. According to data from LSEG, this activity fell by a substantial 21.2% during the first three quarters of this year when compared to the same period in the preceding year. These figures illustrate the complex landscape that banks, including Nomura, are navigating in the Asian financial markets, and they highlight the need for strategic adjustments to maintain competitiveness and adapt to the changing environment.
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Nomura’s CFO, Takumi Kitamura, attributed the loss to insufficient hedging due to a misinterpretation of the U.S. company’s business prospects. The wholesale segment, which includes the global markets and investment banking businesses, experienced a decline in profits.
Is Nomura Banker banned from leaving China?
According to sources, Charles Wang Zhonghe, the chair of investment banking for China at Nomura Holdings Inc.’s Hong Kong branch, has been barred from leaving China due to an ongoing investigation into a prominent dealmaker in the country. The Financial Times reported this development, indicating that the situation is still unfolding.
Is Nomura doing well?
Nomura, the Japanese brokerage and investment company, reported a significant increase in profit for its fiscal second-quarter. The company’s profit jumped to ?35.2 billion from ?16.8 billion in the previous year. The retail division also saw a surge in total stock sales, which increased by 56% to ?3.485 trillion. Nomura’s CFO, Takumi Kitamura, attributed this success to the positive impact of Japanese stocks.
Did Nomura buy Lehman Brothers?
Nomura, a Japanese lender, made a groundbreaking move by acquiring Lehman Brothers’ equities and investment banking operations in Europe, the Middle East, and Africa for a mere $2. The acquisition was followed by the hiring of 150 fixed-income bankers in the region, and eventually, the acquisition of Lehman Brothers’ Asian business. These deals transformed the banks and marked a significant milestone in the financial industry.