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Nomura said to maintain profit abroad after cutting 900 jobs

Thursday, October 27, 2016 - 10:46

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Nomura Holdings Inc is poised to report a second straight quarter of profit from overseas as it boosted revenue from fixed-income trading and trimmed costs after completing job cuts, said people with knowledge of the matter.

[TOKYO] Nomura Holdings Inc is poised to report a second straight quarter of profit from overseas as it boosted revenue from fixed-income trading and trimmed costs after completing job cuts, said people with knowledge of the matter.

Japan's largest brokerage had a pretax profit from operations abroad in the three months ended Sept 30, rebounding from a loss of 45.8 billion yen (S$610 million) a year earlier, said the people, who asked not to be identified. It eliminated about 900 jobs in Europe and the Americas as part of a restructuring announced in April, according to the people.

Shedding a legacy of losses abroad could help Chief Executive Officer Koji Nagai convince investors of the merits of having a global footprint. Tokyo-based Nomura began cutting jobs and shrinking operations in Europe and the Americas six months ago to save about US$700 million and stem six years of losses outside of Japan.

Most of the 900 employees have already left the brokerage, though payrolls for some workers will continue during the current quarter, one of the people said.

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Nomura's Tokyo-based spokesman Kenji Yamashita declined to comment. The brokerage is scheduled to announce its earnings at 3pm in Tokyo.

Global securities firms such as Morgan Stanley are benefiting from a rebound in bond trading. For Nomura, that may help to stem pressures on its domestic retail brokerage business, which until recently had been the mainstay of its profit.

It faces increasing competition with major banks for business from Japanese who are becoming more reluctant to invest, as interest rates plunge and a stronger yen clouds the outlook for stocks.

Shares of Nomura rose 0.3 per cent at 10:48am in Tokyo, paring this year's decline to 27 per cent. The benchmark Topix index gained 0.2 per cent, and is down 11 per cent in 2016, heading for its first drop in five years.

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