Nov. 6 (Bloomberg) -- Barclays Plc and Nomura Holdings Inc., which never ranked among the top 10 merger advisers worldwide in the past decade, are luring hundreds of bankers as competitors cut jobs and cap bonuses under government pressure.

The banks are expanding globally after they bought parts of Lehman Brothers Holdings Inc. out of bankruptcy last year. Barclays, which acquired Lehman’s U.S. unit, plans to hire more than 30 bankers in Europe for its mergers advisory business and has hired about 750 people for European and Asian equities this year. Nomura, which bought Lehman’s European arm, has increased its U.S. workforce by about 36 percent since March and this week hired former Goldman Sachs Group Inc. currency strategist Jens Nordvig, 35.

Nomura, based in Tokyo, and London-based Barclays bought Lehman to compete with the global reach of firms such as Citigroup Inc. and Morgan Stanley. The two, which avoided taking government bailouts, are finding bankers willing to join them after the industry cut 337,500 jobs worldwide and governments move to limit cash bonuses at lenders that got aid.

“Banks that haven’t been bailed out by the government are in a very good position to hire the most talented bankers,” said Shaun Springer, chief executive officer of Square Mile Services Ltd., which advises London financial firms on pay. “They’re paying rates that state-funded banks are being pressured into not paying.”

Candidates Knocking

The Lehman purchase propelled Barclays to the sixth spot among U.S. takeover advisers this year, up from 71st in 2007, according to data compiled by Bloomberg. Globally, the bank ranks 10th. Nomura reported higher-than-estimated second- quarter profit as the bank earned more from its international division than from Japan for the first time. The bank said it plans to use some proceeds from a $4.8 billion share sale last month to expand its U.S. division

“Every day, talented candidates from our rivals are knocking on Nomura’s door,” Chief Financial Officer Masafumi Nakada, 51, said at the bank’s earnings conference Oct. 28. “There is more space for Nomura to take market share.”

Nomura hired Ciaran O’Kelly, Bank of America Corp.’s head of global equities, to oversee the equities business in the U.S. The Japanese bank also recruited Jeffrey Michaels, Citigroup’s head of rates trading in North America, as co-head of fixed income for the region. Nomura in August appointed Citigroup’s former global head of currency research and local-market strategy, Jim McCormick, as head of fixed-income research for Europe. In all, Nomura has added 650 employees in Europe, the bank said.

Independent Banks

“Nomura’s situation is unique compared to other banks as we remain an independent institution and have not taken any taxpayer’s money,” Nomura said in a statement. The bank has “been mindful to ensure our approach to remuneration is competitive. These elements have been fundamental to our success in attracting top talent.”

The worst financial collapse since the Great Depression has prompted governments around the world to regulate banks’ remuneration practices. Last month, Kenneth Feinberg, the U.S. Treasury’s special paymaster, capped the cash salaries of the most highly paid executives at companies that received state aid, including Citigroup and Bank of America.

“Bailed-out banks are trying to figure out how to pay their staff competitive salaries and bonuses in order to keep them,” Springer said. “On the other hand, they want to avoid paying them too much so as to steer clear of the political clamor that will accompany large payouts.”

Bonus Caps

The British government required Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc to halt cash bonuses to workers earning more than 39,000 pounds ($64,690) after it bailed out the lenders for a second time on Nov. 3.

“Barclays has been open for business all the way through the recession, didn’t take government money, haven’t got the EU breathing down their neck, nor people complaining about bonuses,” said Mike Trippitt, a London-based banking analyst at Oriel Securities Ltd. “In that respect Barclays has a lot going for it.”

In Europe, Barclays recruited Sam Dean from Deutsche Bank AG as co-head of global equity markets in May and Citigroup’s Thomas King, 48, as joint global chief of corporate finance in October. The bank also hired Howard Spooner from Goldman Sachs to run equity trading in Europe.

President Robert Diamond, 58, wants the London-based firm to be one of the world’s top three investment banks, he said in a Bloomberg Television interview in June.

Advisory Businesses

“We have been executing our plans to hire the best talent to build our equities and advisory businesses in Europe and Asia to complement our leading U.S. equity and advisory franchises,” said Dixit Joshi, Barclays Capital’s head of equities for Europe and Asia.

Barclays and Nomura are also raiding each other. In July, Barclays hired Satoshi Matsumoto, a corporate financier at Nomura, to expand the British firm’s investment banking business in Japan, while Charles Spero left Barclays’s securitized-products division last month to join Nomura’s U.S. fixed-income team.

To contact the reporters for this story: Gavin Finch in London at gfinch@bloomberg.net; Poppy Trowbridge in London at ptrowbridge@bloomberg.net

Last Updated: November 6, 2009 05:58 EST