If you work in banking and you're worried about your job security, you probably don't want to look at Nomura's new investor presentation. It suggests that the Japanese bank's new strategy and the 350+ job losses in its wholesale bank earlier this year have worked a treat.
Front office revenues 'per producer' in Nomura's wholesale bank were 60% higher between April 1st 2019 and 31st October than in the 12 months from March 2018 to March 2019, according to today's presentation.
The claim is made in the chart below, which suggests that rising 'producer productivity' is correlated with rising profitability in the wholesale division. The bank says revenue growth in its sales and trading businesses is largely responsible for the improvement.
Nomura's productivity chart
As we reported in April, Nomura 'downscaled' businesses it was less strong in, including G10FX, credit and emerging markets in EMEA and Americas. It also optimized G10 rates in EMEA, G10 FX in Asia ex-Japan and cash equities in Asia ex-Japan. Instead, it focused on its core areas like securitized products and G10 rates in the Americas. It's also been hiring for a quant trading team run by Matthew Hampson, deputy chief digital officer, and Michael Anthony, head of US rates algorithmic trading, and reporting to Jezri Mohideen, the bank's chief digital officer.
The strategy seems to have worked. Nomura was ahead of the curve in cutting its equities business in London. Traders at other banks need to hope their senior management don't decide Nomura was head of the curve in trimming fixed income too.
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