Nomura's results are out. As ever, the bank has provided a panoply of presentations, quarterly accounts and six monthly accounts, all of which are accessible here. What you most need to know, however, is that Nomura is cutting staff. Its wholesale bank is now profitable - just. And despite cutting staff, it has increased revenues.
Nomura's headcount changes are detailed in the chart below (taken from here). This shows the addition of 112 people in the US over the past 12 months and the removal of 552 people in EMEA. Nomura's headcount cuts aren't over yet: the bank has only made 35% of its intended personnel cost cuts so far; they won't be completed until the end of 2013 and may even continue into 2014. The wholesale bank (AKA Nomura's investment bank) is only just profitable: it made a profit of 0.2bn yen in the second quarter, on revenues of 137bn yen - a margin of just 0.1%.
In the meantime, it seems Nomura's people are working harder than ever. The bank says it's postponing the replacement of all who leave voluntarily and is curbing all new hires. Despite this, revenues are rising. Net revenue at Nomura's wholesale business was up 68% year-on-year in the second quarter. Fixed income revenues were up 114%. Nomura has been shrinking its equities business, where revenues were down 4% year-on-year in 2Q - although cash equities revenues were up 4% quarter-on-quarter. Nomura has also been shrinking its M&A business, but despite this net revenues across M&A and capital markets at Nomura were up 141% year-on-year.
Much of the increase in Nomura's investment banking revenues is attributed to America, which had a record quarter but some is also attributed to EMEA, where wholesale banking revenues rose 8% quarter-on-quarter despite recent redundancies. This sets a bad precedent: Nomura's policy of cutting staff and making those who remain work harder seems to be working. Other banks may want to take note.
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