Nomura has space to cut a further $187 million in costs, CEO says By Reuters

By Anton Bridge

TOKYO (Reuters) -Japan’s largest securities firm Nomura Holdings (NYSE:) has room to cut costs by a further 28 billion yen ($187 million) in the short- to medium-term, CEO Kentaro Okuda told an investor summit on Tuesday.

The efforts mark the latest in Nomura’s multi-year strategy to cuts costs, drive up return-on-equity and focus on stable, high-profit business lines that has seen it post six consecutive quarters of net profit growth to the end of September this year.

The measures come on top of Nomura’s existing plan to cut 62 billion yen ($414 million) of costs in the short- and medium-term, which include optimising information technology across the group, offshoring certain functions and reviewing office locations.

Okuda also said Nomura was making steady progress towards its target of achieving consistent return-on-equity of between 8% and 10% set last May, for instance by growing its risk-light businesses, which include underwriting and advisory services.

Core to this strategy is Nomura’s global wealth management business, which has grown assets under management threefold over the past four years.

The unit offers brokerage, asset management and loan products and has developed know-how on a par with global standards which Nomura now plans to employ in its Japanese wealth management arm, Okuda said.

Before his presentation, Okuda apologised for the trouble caused by a former Nomura employee who was last month charged for multiple crimes including attempted murder and robbery.

The former employee provided asset management advice to individual and corporate clients and was suspected of robbing a client and having caused a fire at their home in July, Nomura said in a release later on Tuesday afternoon.

Okuda and other executives will take a voluntary salary cut for a period of three months in response to the incident, the release said.

Earlier this year, a bond trading market manipulation case saw Nomura hit with a 21.8 million yen fine from Japan’s banking regulator and temporarily lose its status as a primary dealer of government bonds.

($1 = 149.9200 yen)