Late Lunchtime Links: On the doom at Nomura

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Nomura in Japan

The implications of events at Nomura are sinking in. As was widely reported yesterday, Jesse Bhattal, president of Nomura’s wholesale business, has resigned. The Financial Times says he’d become a divisive figure and lacked the “risk management and markets expertise” to be successful in the current low-growth high-regulation environment, but that Bhattal’s departure was more abrupt than expected after he reached an, “impasse with senior management” and became frustrated with the pace of Japanese decision making.

Increasing the uncertainty, Tarun Jotwani, the head of Nomura’s global markets business is also voluntarily departing. Henceforth, Bloomberg reports that Nomura’s fixed income and equities businesses will be managed separately.

In better times, Bhattal’s departure might prompt an exodus of former Lehman bankers from Nomura. He was, after all, put in charge of the wholesale business to prevent droves of ex-Lehman bankers leaving.

In the current conditions, however, former Lehman bankers may find they have few alternative options.

“His [Bhattal’s] resignation illustrates a turning point for Nomura, and shows that its strategy to boost profit by hiring expensive bankers after the Lehman acquisition isn’t going to work,” Yuri Yoshida, a senior analyst at Standard & Poor’s in Tokyo told Bloomberg. “The business model, which Lehman perfected, is old and won’t work under the new regulatory regime and current market conditions,” he added.

Reuters points out that much of what happens next at Nomura will depend upon who succeeds Bhattal and Jotwani.

If the bank chooses candidates with foreign experience (eg. Philip Lynch or William Vereker), its global ambitions could remain alive. If Nomura chooses Japanese successors, its global ambitions may shrink back to their shrivelled pre-Lehman state.

And in other news:

Although initially profitable, the European and Asian businesses of Lehman Brothers it acquired in 2008 have not remotely met expectations. (Financial Times)

Hiring in Asian financial centres such as Singapore and Hong Kong slowed significantly in the final quarter of 2011, said Hays. (Financial Times)

Chairman of UKFI quits, saying it will take ‘longer than expected’ to sell RBS and Lloyds. (Reuters)

UKFI today announced it has appointed Jim O’Neil — one of the posse of Merrill Lynch investment bankers who advised RBS (alongside continental European banks Banco Santander and Fortis) to make their catastrophic €71bn acquisition of ABN Amro in 2007. (Ian Fraser) 

Morgan Stanley has dispensed with Bill Templer, global co-head of exchange-traded derivatives, and Divya Doshi, managing director for listed derivatives in Singapore. (Financial News) 

Is it possible to start a quant fund from your bedroom? (Quora) 

“Where I'll go is financial consultancy Essentially, I will be doing exactly the same type of work, without the truly insane hours and with a lower bonus. When I told my colleagues, I said it was a lifestyle choice, that's the word you use. But basically I told them: I am sick of sitting here till 3am.” (Guardian) 

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