If you work for Nomura, the annual Investor Day Presentation may have a whiff of Groundhog Day. Around this time in 2019, Nomura unveiled its new strategy to "downscale" FX, emerging markets and credit trading in both EMEA and the U.S. with hundreds of associated job losses. One year on, it seems Nomura's not done with changing the business yet: it's 70% of the way through the process and is just moving into a different phase.
In his presentation today, Nomura CEO Kentaro Okuda said Nomura still needs to cut further $300m (6.3%) of costs from its wholesale bank this year and to provide for the "optimal allocation of [personnel] resources through efficiencies." Nomura doesn't say so explicitly, but in bank-speak "efficiencies" often means layoffs.
Who might be dispensed with in the year to come? Alongside cost reductions from real estate and a move to the cloud, there's more talk of 'standardizing corporate functions', which suggests more infrastructure jobs in operations or HR could be eliminated as roles are centralized and shared across business units. There's talk too of 'optimizing' IT applications, cutting consulting costs, achieving 'operational efficiencies through digitalization' and generally pursuing 'efficiencies' in the trading and origination and financing businesses.
There could be hiring too, though. In today's presentation Nomura also says that it wants to grow its execution services business and to continue its focus on artificial intelligence to improve its electronic trading platform after some heavy recruitment for its e-trading strategy team last year. It also wants to grow its advisory business (with a focus on green technology) after acquiring Greentech Capital Advisors on April 1st, and to focus on an 'environmental, social, and governance' (ESG) consulting unit.
Most importantly, Nomura has now decided that it wants some entirely new sorts of clients: it intends to work with start-ups and to provide customized 'solutions' to privately owned companies in a 'digital and bespoke' fashion. In future, Nomura says it will offer financing and M&A for start-ups, as well as other kinds of 'investment support.' It might need some new people to do so.
Nomura declined to comment on today's Investor Day presentation. If cuts are coming, some teams in the wholesale bank might be more susceptible than others: Nomura said today that its rates trading revenues were nearly three times higher in the first quarter of 2020 than one year earlier; FX and emerging markets revenues were 2.4 times higher. Credit trading, which lost money in the first quarter, wasn't mentioned.
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