Nomura Holdings Inc. (8604) named Steven Ashley as global head of fixed income following the resignations of two top bankers who joined when Japan’s biggest brokerage bought Lehman Brothers Holdings Inc. operations in 2008.
Georges Assi was appointed as Ashley’s deputy, Chief Operating Officer Takumi Shibata told employees yesterday in an internal memo obtained by Bloomberg News. Ashley will be based in London and both appointments are effective immediately, Shibata said in the letter. Keiko Sugai, Nomura’s Tokyo-based spokeswoman, declined to comment.
Nomura, whose overseas operations posted their biggest loss in six quarters for the three months ended September, is trimming $1.2 billion in costs to revamp businesses that have stumbled since it acquired Lehman operations in Europe and Asia. Jesse Bhattal, the company’s wholesale banking chief, and Tarun Jotwani, head of global markets, agreed to step down last week amid the brokerage’s efforts to avert a downgrade by Moody’s Investors Service.
“We are closely watching to see how much capital Nomura will allocate to the fixed-income business,” said Masao Muraki, a Tokyo-based analyst at Deutsche Bank AG. “These are the operations that are most subject to global regulations and competitors are trimming their capital allocation.”
Ashley is taking on some responsibilities that were held by Jotwani, 51, as the brokerage splits the global markets unit into fixed-income and equity businesses.
Jotwani, who was based in London, agreed to step down and will leave Nomura, a person with knowledge of the matter said last week. He and Bhattal, the first foreign member of the bank’s 14-member executive management committee, were among 8,000 Lehman employees who joined Nomura.
Ashley, who was global head of macro products, joined Nomura as global head of rates in the fixed-income division in May 2010 following six years with Royal Bank of Scotland Group Plc (RBS) in London. Assi, who was previously responsible for Nomura’s fixed-income division in Europe, the Middle East and Africa, joined the Japanese bank from Lehman in 2008.
Shares of Nomura rose 2.4 percent to 256 yen at the close of trading in Tokyo today. The stock has dropped 52 percent over the past year, and had slumped to 224 yen, the lowest in at least 37 years, on Nov. 24.
Bhattal’s wholesale banking division is bearing the brunt of a $1.2 billion cost-reduction plan after Nomura’s overseas operations posted their biggest loss in six quarters. Shibata has taken on the 55-year-old banker’s responsibilities on a temporary basis.
Credit Rating Downgrade
Nomura ranked 10th in arranging equity offerings worldwide last year, down from No. 8 in 2009, the first full year after it bought the Lehman operations, according to data compiled by Bloomberg. The firm was 12th in mergers advisory, rising one spot from two years earlier, the data show.
Moody’s said in November that it may cut Nomura’s credit rating from Baa2, the second-lowest investment grade. The review will consider the firm’s cost-reduction plans as well as its “failure to generate synergies and returns from the Lehman acquisition,” the rating company had said on Nov. 9.
“The fixed-income unit is a business that requires the credit rating to be competitive,” Deutsche Bank’s Muraki said.
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