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Nomura CEO is confident on overseas profit as 'storm has passed'

Wednesday, November 30, 2016 - 13:10
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Nomura Holdings Inc Chief Executive Officer Koji Nagai said he's confident that Japan's biggest brokerage will sustain a rebound in overseas profit this fiscal year as global financial-market turmoil subsides and cost cuts take hold.

[TOKYO] Nomura Holdings Inc Chief Executive Officer Koji Nagai said he's confident that Japan's biggest brokerage will sustain a rebound in overseas profit this fiscal year as global financial-market turmoil subsides and cost cuts take hold.

"The storm has passed, but the skies aren't clear yet," Mr Nagai said Wednesday at an investment forum hosted by the securities firm in Tokyo. He said the company is on course to achieve 50 billion yen (S$633 million) of pretax profit abroad in the year ending March, a goal that it scrapped the previous fiscal year.

Nomura has earned 40.1 billion yen outside of Japan in the first six months alone after enjoying a rebound in fixed-income trading and eliminating hundreds of jobs in Europe and the US. The firm posted six straight years of losses overseas as it struggled to build a global franchise after purchasing Lehman Brothers Holdings Inc's Asian and European businesses during the 2008 financial crisis.

Mr Nagai said in a February interview that it was impossible to predict when the Tokyo-based firm would become profitable overseas because of worldwide market volatility. Japan's surprise introduction of negative interest rates, an oil slump and mounting concerns over the health of European banks were among factors battering the nation's financial firms at the time.

"There's no point discussing such topics during this rainstorm, unfortunately," the CEO said in the interview.

"That's something we can talk about in normal times. We have to monitor the situation carefully under these circumstances."

Shares of financial firms have rallied recently on speculation that US President-elect Donald Trump will pursue a stimulative fiscal policy and ease banking regulations.

Nomura has jumped 19 per cent since the election, which also triggered a weakening of the yen and a 12-day rally in Japan's Topix stock index.

Separately, Nomura said it's considering investing 10 billion yen in startups as part of an initiative to promote innovation in Japan. The company is teaming up with Nomura Research Institute Ltd and Nomura Real Estate Holdings Inc on an "accelerator" programme to identify and support ventures, it said in a statement. The programme will start at the end of the year, it said.

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