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Nomura’s Wall Street push looks like a costly mistake

Nomura Wall Street

Too expensive for non-US banks?

Nomura has been hiring on Wall Street. So far, it has been to no avail.

In May last year, Nomura was hiring bond traders in preparation for a return to volatility. In October last year, it was hiring 15 senior investment bankers for its US operations. Nomura’s total headcount in the Americas increased by by 168 in the 12 months to March.

Over the same period, Nomura’s US business went from a profit of ¥31bn ($260m) to a ¥14bn loss.

Nomura’s top line growth in the US market hasn’t been too hot either. As the chart below shows, revenues actually fell year-on-year in the fourth quarter (the three months to March). By comparison, the European business – which benefited from a mere 24 extra staff in 2014, achieved a revenue increase of 7%.

Nomura revenues US

Source: Nomura 

Nomura’s Wall Street performance looks all the more miserable in light of exchange rate changes. The dollar has appreciated by nearly 20% against the Yen in the past year, something which should have fed back into Nomura’s results, which are reported in Yen.

Wall Street-based Nomura bankers who are worried about their futures might want to look across to BNP Paribas. The French bank also reported its quarterly results today. Trading revenues and profits in its investment bank soared thanks to the declining value of the euro.

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