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Bad omen for Nomura bankers

First they had to tolerate the arrival of 2,500 Lehman bankers on inflated guarantees. Now Nomura’s existing staff are being asked to take orders from their uninvited guests.

On Friday, Nomura revealed that ex-Lehmanites Christian Meissner and William Vereker are to be heads of investment banking for Europe, the Middle East and Africa, and that Glenn Schiffman will head Asia-Pacific investment banking, based in Hong Kong.

The appointments are said to be another move to keep Lehman bankers on side, but may do more to alienate Nomura bankers who are already said to be peeved at the generous packages on offer to the new arrivals.

With losses of 148bn in the global markets division in the first half of 2008, there’s also a strong possibility that Nomura will need to trim costs in the not too distant future. Headcount was to be reduced by 700 during the integration process anyway; if more cuts become necessary legacy staff now look certain to suffer most.

The good news for Nomura bankers is that headhunters say this is unlikely to happen: the Lehman people are keen to leave the instant guarantees have been paid out.

“You’re going to see a lot of natural fallout from Nomura in March/April when the Lehman people get 70% of their first payout,” says one. “Redundancies won’t be necessary.”

Nomura typically pays considerably less than Lehman. Last year, the average European employee at Nomura earned 156k, against 205k for the average Lehman banker globally.

The bad news is that unless things pick up by spring (unlikely), former Lehman bankers won’t have anywhere to go to. If so, sticking with Nomura will seem distinctly appealing and Nomura bankers may yet find themselves displaced permanently.

Comments (14)

  1. I personally think Nomura did a bad deal in acquiring LB operations in Europe… given that LB senior people have good client relationship it was much better to hire just the most senior people… I hope for Nomura that they will stop the funky way LB people manage the investment banking business, and now they will be more serious than before…

  2. “Redundancies won’t be necessary.” Too true, expect much withering on the vine. With reference to payouts at Nomura being less than Lehmans I having recruited for Nomura over a number of years I found the payout to be higher in % terms plus comapring European and Global pay levels is not like for like by any manner of means

  3. This takeover of Lehman by Nomura is going to be a disaster. The corporate cultures could not be more different. The “old” Nomura (London) was a conservative, steady, internal growth kind of company. Lots of deference learnt from japanese culture. These Lehman guys (at least in my team) are are gung-ho, aggressive, arrogant and behave like our way of doing things is somehow inferior. I really hope these guys are gone soon.

  4. I think Nomura have got an excellent deal out of this. A small IB had bought a heavyweight. I think Nomura traded less than 10% of what Lehman did every day. As for the comments regarding Lehman staff, they are actually some of the best professionals in their field. Maybe you Nomura employees are feeling threatened by people who can do things better than you. Lets be honest, you joined Nomura because you couldn’t get into a big IB!

  5. To John Smith,
    dear John, if you refer to brokerage, you should agree that lehman brother’s broker reports are low quality, lower than many independent brokerage firms… if you refer to IBK, they have good client relationship, good formatting skills, but they are a sort of 2nd tier when compared with the other american investment banks (GS, ML, MS). In terms of management, LB has always tried to show a different style of management and culture compared with other american IBK… for example they go home at 10 pm, while others go home at midnight… they hire many women, they placed a woman as CFO (dismissed after 6 months)… they want to show they are smart and creative.. so my message for Lhemans people is: are you smart and creative? Then go to work for an advertising agency, because in the investment banking world people like you can only do exactly what you did! Go bankrupt!

  6. lehmans have some of the best professionals in their field ???? where did that come from John… on the whole a very mediocre lot have gone over to Nomura…one can hardly blame them…a good final payout from a too generous new employer or no job at all !!!

    guaranteeformetooplease Reply
  7. John Smith, if Lehman were such hot stuff, why did the bank fail?……..

  8. Come on now guys.. stop being childish..

    Accept what’s happened in the banking world, learn from it and just move on.. Life’s too short for crying over split milk…

    Everyone’s drawn a short straw ..fact..

    We have all been affected by your sordid affair – mis management of funds globally.. Am sick to death of reading about you guys moaning about grossly inflated salaries

    Think about the millions of people globally who have been made homeless by this whole financial mess.

    All I read on this forum is the me .me. me factor ..selfish bunch!

    Get to grip with reality – the lot of you ?

    The banking sector has change for ever, no more fat salaries and bonus – shame none of the CEO’s of any of the banks the govt has bailed out – has owned up to making a mistake with our money….
    “No public apologies ” – nothing.. its a disgrace !

    Thank god the govt had the common sense to step in to sort the mess out…!!!!

    No one is above the law – you break the law – you pay for the consequence !!!

    The govt now out to deal with any bankeror banks that fall foil of the financial law – no more fat cat salaries..its about accountability from now

  9. i think the 2 year bonus guarantees are a mistake – nobody has a 2 year view in this business. Guarantee for this year fair enough … to try and prevent good people to go somewhere else. But i think they should aim to integrate quick and have everybody on the same playing field by this summer.

  10. I know of some very ordinary fixed income guys working in Emerging markets that have gone from Lehman to Nomura, hope they’re not getting a guaranteed payout.

  11. I think the Lehman guys had nowhere to go and the Nomura deal was a godsend. They were way overpaid for where they were and could have been brought on board for probably a quarter of what they have got and still been grateful to their new masters.

  12. If it is true Nomura made only 10% of what LB was making a day – as someone suggested in a previous post – perhaps that is because Nomura was never in the business of selling absolute crap to clients without any scrupules in the first place. In many parts of the world you’d better not even whisper you’re ex-Lehman, or else bereft and desperate clients, mini-bond victims and other people who saw their lifelong savings disappear thanks to these overleveraged cowboys, will go at your throat. At least ‘old’ Nomura could look its clients straight in the eyes and the much ridiculed conservativeness of Japanese financials was gaining more sympathy throughout a world, that is increasingly fed up with US investment banks’ style and talent to screw things up. That said and given the very generous lifeline provided to them in times of massive layoffs, these guys could at least show some appreciation and acknowledge that LB never even came close to Nomura’s traditional stronghold in Japanese equities. It’s a shame they’re allowed to hand out their new cards carrying Nomura’s name, while boasting still how they did everything so much better at Lehman. Who got bust in the first place?

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  13. It is understandable to an extent that there is an anti-Lehman concensus. However it is important to note that the Equities and Investment Banking divisions, that were taken over by Nomura, were neither responsible for bringing the bank to its knees, nor the global banking crisis, and associated losses. These were both profitable areas of the business and were market leading in terms of product, people and technology, which is why their value was bought by Nomura. As for compensation packages, the guarantees are not across the board and none are longer than 1 year.

  14. I think that certain quarters of Lehman do display unacceptable arrogance and that we (ex-Lehman) have a lot to learn from Far Eastern culture – humility, deference, respect, etc. It was, afterall, the arrogance in certain parts of the bank that brought it down – no question at all about that. I imagine that the greater an individual’s arrogance, the greater the likelihood of his / her departure post March ’09 and the fewer of those guys on board the smaller the chance of a repetition of the behaviour that has resulted in this crisis.

    The Nomura acquisition of parts of Lehman was a brave move and there are many here at ex-Lehman that respect that and are doing their utmost to make the new venture succeed.

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