Opinions on Nomura US

Anyone have any opinions on Nomura in US? They're retrenching from Europe (and US to an extent), but have grown considerably over the last few years in terms of no. of bankers. How would they feed into PE? Thanks all.

 

They were supposedly building their U.S. platform around Glenn Schiffman (ex-Lehman) and then he bounced. And then they had the scandal. Looks like U.S. expansion put on hold or cancelled.

 

Nomura has been growing aggressively in the US. They hired 1k people in the last year. They are also the largest firm in the states that is not affected by the Volcker Rule, so they will be the only broker-dealer with substantial trading operations. But their M&A is still shitty.

"There are three ways to make a living in this business: be first, be smarter, or cheat."
 
Sandhurst:
Nomura has been growing aggressively in the US. They hired 1k people in the last year. They are also the largest firm in the states that is not affected by the Volcker Rule, so they will be the only broker-dealer with substantial trading operations. But their M&A is still shitty.

Hiring does not equate to a stable business, especially when you need to replace the trove of persons leaving.

How are they not affected by the Volcker rule. Please explain.

 
Best Response
TheMasao:
Sandhurst:
Nomura has been growing aggressively in the US. They hired 1k people in the last year. They are also the largest firm in the states that is not affected by the Volcker Rule, so they will be the only broker-dealer with substantial trading operations. But their M&A is still shitty.

Hiring does not equate to a stable business, especially when you need to replace the trove of persons leaving.

How are they not affected by the Volcker rule. Please explain.

Net hiring in a time of net layoffs is equatable to management thinking that it has a growing business. So, accounting for managerial error, it's a generally good sign.

They are not affected by the Volcker Rule because they are not deposit-taking institutions; i.e. they never became banks, so they don't have to stop taking proprietary risks. MS, Goldman, etc all converted to "bank" status so they could access the Fed discount window during the crisis. Nomura got bailed out by Japan, which didn't have such a policy. Today, Nomura is the largest i-bank left on the street that is technically still an i-bank, as opposed to an i-bank division of a larger actual "bank/"

"There are three ways to make a living in this business: be first, be smarter, or cheat."
 

Well, at least the last time I met with Nomura (Q4 2011) they were planning to reduce exposure as a result of the Volker Rule. Nomura, along with other large Japanese proprietary investors (including Norinchukin Bank) are expected to meet Volker Rule requirements. While I do agree Nomura and others do not take deposits in the in the US, voluntary action is planned and should be expected.

Nomura's penchant for management error knows no boundaries. The most recent highlight is Wholesale Banking Chief Bhattal resignation.

Nomura will be acquired over the next year or so. Most everyone with a pulse around Tokyo knows this is coming.

http://www.ifre.com/smbc-nomura-now-theres-a-thought/20045409.article

 

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