Japan’s largest interbank brokerage, Nomura, to close derivatives business, prepares to shed 600 jobs

Japan’s largest brokerage, Nomura, is preparing to reduce the size of its European equities business and close its underwriting and derivatives businesses altogether.

As part of the downsizing, which has resulted in an increase in share price of 9% as investor confidence picked up in its domestic heartlands, Nomura will reduce its headcount by between approximately 500 and 600 employees, distributed across its North America and European operations.

The company’s full strategic plan will be announced on April 27 when its annual results are due for publication, with the level of redundancies being subject to varying estimates inside and outside Japan. Whilst Reuters estimates a figure in the region of 500, Japanese news source Nikkei considers it to be closer to 1,000.

Whilst the Japanese divisions of Nomura will remain untouched, its overseas ventures in the Western hemisphere have been affected, alongside many otehr large interbank electronic trading giants, by market volatility and waning profits that have resulted in many Western banks including Credit Suisse, Barclays, RBS and HSBC, all of which have offloaded non-core assets, closed down entire divisions and made significant reductions in staff over the last two years.

Although the results for the fourth quarter of this financial year are yet to be published and will arrive along with Nomura’s annual report on April 27, the third quarter presented some harsh realities as net income was down 49% compared with the same period in 2014, at $230 million compared to $327 million in the third quarter of 2014.

Now under the steerage of new CEO Tetsu Ozaki, the firm, according to his statement yesterday is “taking decisive action to refine the services we offer to our clients.”