Nomura Holdings' new CEO plans to make overseas operations profitable by June 2014.
Koji Nagai, who became CEO after his predecessor, Kenichi Watanabe, resigned amid an insider-trading scandal, said it will take time to make a profit abroad as the company will first have to implement the cost savings program by March 2014. Eliminating jobs "will generate restructuring costs after that," he said.
Shares of Nomura dropped to near a 37-year low as the 2008 purchase of Lehman Brothers Holdings Inc.'s European and Asian units swelled costs that led to nine straight quarters of losses abroad.
"We are not going to lower the flag as a global bank," said Naga. "We want to be an Asia-based global investment bank."
Nagai aims to arrest the slide by paring $1 billion in expenses and improving wholesale banking operations.
The firm announced it will cut costs by $450 million in Europe and the Middle East, $210 million in the Americas and $340 million in Asia, including Japan.
About 45 percent of the cuts worldwide will be from paring staff, with the rest coming from other operational costs. The bulk of the job losses will be in investment banking and equities, it said.
The firm will also expand its fixed-income business globally and reassign people from other divisions to join the unit, two sources said last week.
As part of efforts to make Asia a "mother market," Nagai said the company may buy an investment bank or brokerage in the region to tap economic growth and the increasing number of affluent people. The firm is reviewing "a couple" of potential acquisition targets in Asia, he said.
Countries including China, India, Indonesia, Thailand and Vietnam are of interest, he said. The brokerage may buy assets or set up joint ventures with local firms to get access to facilities and operations, since they do not find it realistic to do this from scratch.
The firm will begin communicating the job cuts to staff on Sept. 17 in Europe, Asia and the Americas, the CEO said.
Nomura posted a ¥12.1 billion pretax loss from businesses abroad in the three months that ended in June, its ninth in a row. Europe lost ¥16.4 billion, Asia lost ¥1.9 billion and the Americas earned a pretax profit of ¥6.3 billion.
Nagai said he wants to achieve a target of ¥50 in earnings per share by March 2015, a year ahead of schedule. Nomura's earnings per share totaled ¥3.2 in the year that ended in March.
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