Nomura Orient International Securities Co has trimmed staffing by about two-thirds in its China wealth business over the past two years. — Bloomberg
TOKYO: Nomura Holdings Inc has scaled back its original focus on China wealth to prioritise an expansion in brokerage and asset management in the world’s second largest economy, according to sources.
Nomura Orient International Securities Co has trimmed staffing by about two-thirds in its China wealth business over the past two years, the sources said.
Nomura is now seeking a new chief executive officer (CEO) for the securities business as Japan’s biggest brokerage plans to focus on asset management and research, and will invest further in its sales and trading business on the mainland, they added.
The overall venture has been under pressure to revive its performance after posting consecutive years of losses since being formed in 2019.
While it was confident that its expertise of catering to rich Japanese would help give it an edge in China, its wealth business push has teetered under President Xi Jinping’s “common prosperity” drive, a slowing economy and stiff competition.
The bank is constantly reassessing the business and will not comment further on personnel matters or breakdowns of employee numbers, it said in an emailed reply to questions.
The bank in 2023 flagged that it was reviewing its strategy for the Shanghai-based venture amid losses and then last year said it had finished the assessment.
While Nomura’s struggles in China are shared by other global firms that have had to temper their initial exuberance, its prior losses have exceeded many of them.
The entity’s loss in 2023 narrowed by 19% to 184.5 million yuan after a record shortfall the prior year.
It had a total of 246 employees, though the annual report didn’t break out the number of wealthy employees.
Back in 2020, the firm had targeted raising its headcount to 500 and become a fully licenced securities house by the end of 2023.
Brokerage revenue, which included contributions from wealth management, accounted for almost 60% of its total fees and commission by end of 2023.
The new CEO will work closely with the head of the China committee of Nomura Holdings, who serves as the primary liaison to the Tokyo headquarters and guides its direction in the mainland, the people said.
In a sign of increased oversight from Japan, the head of this steering committee was changed with deputy president Toshiyasu Iiyama stepping in as of April 1, according to its website.
It had previously planned for Mitsutaka Kitamura, the venture’s general manager, to have both roles.
Iiyama, one of the broker’s most senior executives, is also Nomura’s chief of staff. — Bloomberg
