Nomura is exiting equity derivatives, equity research and equity under-writing in Europe, Middle East and Africa (Emea). However, the Japanese bank remains committed to its Emea equities business, which is now consolidated around its convertibles, equity execution activities through Instinet and equity capital market for Japanese corporates. The bank will also retain its Asian equity stocks sales team, according to a source close to the situation.
Nomura Holdings, announced last week several changes to its wholesale businesses in Emea and the Americas, following a strategic assessment of its international operations, which will include axing a brokerage team and hundreds of jobs in Europe and the Americas.
"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," said the source adding that the restructuring of the bank's operations in the two regions will position Nomura for "sustainable profitability under the new market and regulatory environment", while reaffirming Nomura's commitment to improving the performance of its international businesses.
As a result of the current environment in Europe, Nomura has been forced to re-assess its equity structured products business. Although Nomura Securities, the entity issuing the bank's structured products under its global markets division, will remain untouched and continue to manage the bank's structured products, all equity issuance in Emea has been halted.
"This is part of an ongoing review of the bank's operations with the goal of reallocating capital and resources in those areas where it feels it can have the greatest client impact," said the source. "The bank has had to adapt to the changing market and regulatory environments. The changes Nomura has made will allow the bank to capture opportunities under the new environment and focus its efforts on areas where it has strong client capabilities."
As part of the changes announced by the Japanese bank, and the decision to close certain businesses in Emea a number of executives in its equity derivatives business such as Alessandro Ricci, head of structured equity and fund derivatives sales for Emea, have been put at risk. These executives remain at the bank and could be redeployed to other areas after a consultation period but is likely that most of them will part ways with the bank. In the Americas, Nomura will exit certain areas while remaining committed to its core client offerings. Nomura's Asia-Pacific platform will not be affected by the changes.
The Japanese bank promoted John Goff to the position of head of global markets structuring at Nomura Securities in August 2015, and appointed Simon Bristow as head of structured product transactions, to support Nomura's Emea business in non-flow transactions reporting to both Yutaka Nakajima, head of global markets Emea, and Matt Reader, head of fixed income structured products at Nomura.
In 2015, Nomura also appointed Eric Dutruit as managing director for equity solutions in London with a focus on northern Europe, reporting to Ricci; and Ed Steel, who joined the bank's equities team as managing director with a particular focus on equity front office risk and structured derivative products globally and in Emea, reporting to Todd Sandoz, global head of equity trading and execution services, and Jonathan Och, head of global markets front office risk.
"We are taking decisive action to refine the services we offer to our clients, while continuing to leverage our dominance and unique strengths in Asia, providing tailored solutions to our clients globally and continuing our 90 year legacy of putting clients at the heart of everything we do," said Tetsu Ozaki (pictured), Nomura Group COO, in a statement. "This exercise will deliver significant efficiencies and cost savings for Nomura, refocusing the firm's activities and reallocating resources towards its areas of expertise and most profitable business lines."
A full strategic plan outlining all changes will be presented on April 27, 2016 in conjunction with the announcement of the Nomura Group's fourth quarter and full year operating results.
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