Despite headwinds, Nomura of Japan says it intends to go it alone

TOKYO (Reuters) – Japanese-based Nomura Holdings does not intend to follow the example of its Wall Street rivals and seek a rapprochement with a commercial lender, its Reuters managing director said , pledging to remain independent even though the investment bank was facing its first annual loss in a decade.

In January, Nomura announced a net loss of more than 101 billion yen ($ 903 million) in the first three quarters of the year, through the end of March. It has since announced a restructuring plan aimed at reducing the costs of its billion dollar wholesale business and closing more than 30 of its 156 branches.

But he will not seek to join a commercial bank, said Koji Nagai, renouncing a model that has reshaped Wall Street since the financial crisis and saw Morgan Stanley join the largest bank in Japan, Mitsubishi UFJ Financial Group.

"We can reach an agreement with any partner if we make this effort. We do not belong to any banking group and that is our strength, "Nagai told Reuters during an interview granted this week to an embargo on Friday.

Even without a capital link with one of the three Japanese megabanks – Mitsubishi UFJ, Mizuho Financial Group and Sumitomo Mitsui Financial Group – Nomura was able to maintain its formidable presence in the Japanese investment bank, especially in transactions.

He announced to Nippon Paint Holdings a bid of $ 2.7 billion on the Australian group DuluxGroup, announced this week.

But it does not have the power of a rival such as Morgan Stanley, which, thanks to its merger with Mitsubishi UFJ, has been able to take advantage of the huge balance sheet of the Japanese bank to offer financing alongside consulting services.

WISH AND INDEPENDENCE

Nagai said that, even if he felt "envied" over competitors with lending power, a capital alliance with one of the megabanks would sacrifice Nomura's independence – probably closing him to customers allied with one of the other megabanks, given the Japanese practice of holding a "main bank" and doing business with this lender's subsidiaries.

"We will not give up our independence by joining a capital alliance," he said.

As part of the cost redesign, Nomura also plans to cut a hundred jobs in London, the center of its banking business in Europe, had already announced Reuters.

Wholesale trade was constrained by lower fixed income trading revenues.

Rating firm Moody's stated that if Nomura's restructuring plans were successful, it would help refocus its business and reduce earnings volatility.

Nagai said Nomura was also focused on directing wealthy clients – often defined as those with less than $ 1 million worth of badets – to its digital platform. The bank is looking to hire online brokers to help implement this strategy, he said.

($ 1 = 111.9100 yen)