As we noted back back in February , 2009 is shaping up to be the year of the Japanese bank. This remains the case three months on.
Despite making big losses after acquiring parts of Lehman’s ex-US business, Nomura is hiring across the board. Mizuho says it aspires to recruit corporate financiers (even if it is uncommitted to bringing anyone on anytime soon). And Daiwa has now acquired Close Brothers Corporate Finance and asserted its intention to grow across investment banking, equities, fixed income and derivatives.
Surprisingly perhaps for a Japanese bank with a comparatively small operation in Europe, Daiwa is showing itself highly attuned to the ways of the investment banker. In the process, it is putting its larger rival Nomura to shame.
When Nomura set about wooing former Lehman bankers in Europe last year, it did so with generous guaranteed bonuses, a high proportion of which paid out within 12 months. As a result, the bank is now saddled with uncomfortably high compensation costs and little certainty that the people it paid for will stick around once their guarantees expire.
Daiwa is proving a little more circumspect.
According to reports, Daiwa is tying in Close Brothers’ corporate financiers with a scheme promising them a greater share of profits, but requiring a five year wait before it divests.
Daiwa appears to have spare cash for new recruits as a result. Rumour has is that the bank has a generous war chest with which to supplement the Close Brothers’ business, and that it’s offering guarantees.
The smartest of the Japanese banks may, however, be Mizuho. By signaling its intention to hire before it’s ready to do so, Mizuho has ensured a steady flow of CVs. If and when it decides to increase headcount, it will have a readymade database of possible candidates, all of whom are probably going for a pittance.