Nomura's not perfect. In 2016 it dumped 500 of its European equities traders almost overnight. It's most recent global results, for its fiscal second quarter, showed fixed income revenues falling 20% year-on-year, while revenues in the stump of its equities business were flat. Its U.S. and European operations made a combined loss of $27m in the three months to September, and headcount in Europe was 100 people lower than the previous year. Why then, are traders eager to work there?
Nomura's litany of sales and trading hires in 2017 has raised some eyebrows. The Japanese bank's most notable additions this year include Gokhan Buyuksarac, a top Goldman Sachs emerging markets trader, who joined in London in April, followed closely by Meraj Khan, the former head of emerging markets macro trading for Europe at UBS, who joined in New York. Also in London, Nomura hired Fred Jallot, the former head of EMEA trading and structuring at Citi as its EMEA head of global markets in July, plus Omar Ghalloudi, the former head of investment grade credit trading at Citi, plus two senior emerging markets traders from Credit Suisse and Bank of America. In Paris, it hired Frederic Giovansili, Citi’s former head of French markets, to set up a new credit trading desk. In Singapore, it hired Ajay Abrol from Millennium for macro trading in July.
Of course, there have also been exits to the likes of Barclays, but Nomura's ability to attract trading talent from top tier rivals has been often reiterated this year. For a bank that doesn't even rank on Coalition's tables of top banks (except in Asia), it's quite impressive.
So what's Nomura's secret? The Japanese bank didn't respond to our requests to comment for this article, but big promotions seem to be part of it. Jallot went from being the head of trading and structuring Citi to the head of global markets at Nomura. Buyuksarac is understood to be running Nomura's emerging markets business.
There's also the promise of being reunited with old colleagues. Citi's markets professionals are seemingly being lured to Nomura by Wissam Farrah, a former Citi veteran who joined as head of EMEA global markets sales in October 2016. In the background is Steve Ashley, the highly-respected ex-RBS trader who heads the whole global banking and markets business.
And then there's the pay. Nomura doesn't disclose compensation per head within its global markets business, but its London operation paid an average of $321k (£243k) last year. However: headhunters say this is only half the story - if it likes you, Nomura will reportedly pay a lot. "They're very punchy in terms of pay," says one fixed income headhunter. "They'll offer very high basics - I've seen VP's there on salaries of over £250k sterling - and they'll pay bonuses that are very closely aligned to performance." A former Nomura trader agrees: "There's a much closer correlation between P&L and compensation at Nomura than at other banks. If you make 10 bucks at J.P. Morgan or Citi, you have no idea how much you'll get paid. At Nomura, it's very clear."
This isn't all though. While other banks closed proprietary trading desks and resorted to low risk market-making, Nomura created a new "principal trading desk" in June this year - only to close it again in October after making a loss, although six people in the ten man team are thought to remain with the bank. "Nomura have a much more proprietary approach to trading than other firms," says the trader. "They appeal to people who want to take risk. They're less heavily regulated and less bureaucratic - if there's a good reason to do something, it happens quickly, "
One of the bank's recent hires agrees. "Nomura is smaller and more flexible," he says. "It can move fast. It's a more entrepreneurial place." With many hedge funds struggling, traders who might otherwise quit banks for the buy-side can choose to join Nomura instead.
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