NOMURA’S TOP management have resigned en masse following the bank’s involvement in a damaging domestic insider trading scandal in Japan.
The Japanese bank says that chief executive Kenichi Watanab and chief operating officer Takumi Shibata have resigned. The two men, who led the bank’s takeover of the non-US operations of Lehman Brothers and its subsequent global push, will be succeeded by more domestically focused executives.
The replacements – with Koji Nagai, president of Nomura Securities, the domestic brokerage, taking over as chief executive – will throw the bank’s global operations into turmoil, London bankers have said. Atsushi Yoshikawa, currently head of the company’s US operations, will assume the role of chief operating officer.
The changes signal an end to a four-year period of international ambition, centred on the London-based operations of the defunct Lehman franchise. Senior London staff are already planning to leave.
Other internationally experienced management, including Hiroyuki Suzuki, co-head of banking, Hiromu Yamaji, banking chairman, and Philip Lynch, head of Asia, will also step down as part of the reshuffle.
Mr Watanabe and Mr Shibata had come under mounting criticism over the loss-making overseas businesses following the Lehman acquisition in 2008. Nomura shares rose 5.7 per cent yesterday.
Nomura’s global expansion has faltered in the face of a sharp downturn in market trading, due to the euro zone crisis, as well as management missteps.
The bank said yesterday its global wholesale business posted a ¥8.6 billion pre-tax loss for the first quarter in spite of a $1.2 billion cost-cutting exercise centred on the division. Group net profit plunged 91 per cent from the previous quarter to ¥1.9 billion.
Japan’s largest investment bank by revenues has attempted to stem the red ink through the cost-cutting exercise, launched late last year. However the reputational damage caused by the insider trading scandal has started to affect Nomura’s domestic operations, which have provided the bulk of its profits in recent years and have been critical to covering its overseas losses. – Copyright The Financial Times Limited 2012
