Nomura Holdings Inc. (8604) and Daiwa Securities Group Inc. (8601) (8601) hired the most university graduates in four years, leading a resurgence in recruitment by Japanese brokerages as the economic outlook improves.
About 650 recruits joined Nomura’s domestic securities unit today, 6 percent more than last year, with most to be assigned to retail operations, said Kenji Yamashita, a spokesman for Japan’s largest brokerage. Daiwa boosted its intake by 50 percent to about 450, spokesman Hiroharu Misawa said.
Buoyed by the stock market’s climb to a four-year high, Japanese investment banks are adding students fresh out of school to bolster retail operations even as they cut resources abroad. Business sentiment rose in March and confidence among brokerages jumped by a record as Prime Minister Shinzo Abe led efforts to end deflation, a central bank survey showed today.
“The hiring increase shows the worst is over and the business environment in banking is getting better,” said Katsunobu Komizo, president at Executive Search Partners Co., Japan’s biggest recruitment firm focusing on banks.
The country’s seven largest brokerages increased graduate recruitment by 6 percent to 2,150 in total this year, according to company data compiled by Bloomberg.
The figures reflect broader job improvements for Japanese graduates, boding well for an economy where unemployment among 15 to 24 year olds was 6.6 percent in February, higher than the 4.3 percent for the entire workforce. About 82 percent of university graduates found work as of Feb. 1, up for a second year from a record-low 77 percent in 2011, a Labor Ministry report showed in March.
Mitsubishi UFJ Morgan Stanley Securities Co. increased graduate hiring to about 180 from 47 for the fiscal year starting today, said Hiroaki Konishi, a spokesman for the joint venture between Japan’s biggest bank and the Wall Street firm.
The nation’s other two so-called megabanks recruited fewer graduates for their securities units. SMBC Nikko Securities Inc. (8316) hired about 300, compared with 386 a year ago, said spokesman Tadataka Ishida. Mizuho Securities Co. (8411) took on about 180, down from about 340, spokesman Mikihiko Kitano said.
Confidence (JNTSMFG) among big manufacturers improved last quarter as expectations for more monetary easing weakened the yen and boosted stocks, the Bank of Japan (8301)’s quarterly Tankan survey showed today. An index of sentiment among financial products dealers climbed to 60 from minus 28, the biggest jump since the central bank began compiling the data in December 2003.
Younger staff are attractive to Japan’s investment banks because they cost less than older employees and can adapt to industry changes such as rules introduced to reduce risk-taking since the 2008 collapse of Lehman Brothers Holdings Inc., according to Executive Search’s Komizo.
“They’re more capable of adjusting to new business models than senior bankers, who were successful with old models that were washed away after the Lehman shock,” said Komizo. The retail brokerage business is also becoming more competitive with the growing popularity of online trading, he added.
Nomura (8604)’s retail assets rose to 80.3 trillion yen ($855 billion) in February, the most since December 2007. About 45 percent of the Tokyo-based firm’s securities profit before taxes came from domestic retail operations in the nine months ended December.
“The securities business is difficult but also very interesting,” Nomura Chief Executive Officer Koji Nagai told recruits today in Tsukuba, north of Tokyo. “I would like you to work on polishing yourselves so you can establish your own values and philosophy of life.”
The resurgence in graduate recruitment is set to continue into 2014. Mitsubishi UFJ Morgan Stanley plans to double the number to 360 next year, and SMBC Nikko will boost hiring to 410, spokesmen said. Daiwa targets an increase to 500, and Mizuho, Okasan and Tokai Tokyo also plan to raise their intakes, according to their spokesmen.
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