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Nomura focuses on expansion of investment banking business in US

It is part of efforts by Japan's biggest investment bank to earn more stable income from advisory services

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Nomura Holdings CEO Koji Nagai says the bank will keep its global platform though it has been shrinking businesses that are unprofitable and not needed by its clients.

Tokyo

NOMURA Holdings Inc aims to increase its share of business arranging foreign exchange hedging, acquisition finance and other deal-related services for corporate clients in the United States, the chief executive officer of Japan's biggest investment bank said.

The bank is in the process of re-allocating global resources to shift its growth focus to the Americas, which has the world's largest pool of investment banking fees.

It is trying to build up businesses there without taking on bigger risks. "Our key words are 'America', 'corporate clients' and 'solutions business'," CEO Koji Nagai told Reuters in an interview.

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He said Nomura's global markets business - involving the trading of fixed income and equity - remains an important source of revenue but is not currently under consideration for further expansion.

"Rather, our focus is on advisory and primary business, which are not subject to market risks to the same degree and do not use our balance sheet much," he said.

Primary business includes helping client companies issue stocks and bonds.

"In addition, we will expand our solutions business such as acquisition finance and foreign currency exchange services for deals we advise on."

Mr Nagai forecasts the expansion of Nomura's client financing and solutions business in the US and elsewhere to boost revenue by US$250 million in the medium term.

Nomura has made US expansion of its investment banking arm one of its priorities as it strives to earn more stable income from advisory services.

Its recent hires include bankers covering healthcare, technology and financial services. The US push comes after major restructuring in 2016, which included significantly shrinking its European operations, resulting from its acquisition of Lehman Brothers' Asian and European businesses in 2008.

Nomura suffered three consecutive quarters of pretax loss in its overseas business through September.

Earnings in the latest quarter were also weighed down by a one-time 20 billion yen (S$248 million) charge, part of a settlement with U.S. authorities regarding the sale of residential mortgage-backed securities before the 2008 financial crisis.

"We will absolutely keep our global platform though we have been shrinking businesses that are unprofitable and not needed by our clients," Mr Nagai said. REUTERS