Daiwa Securities Group Inc., Japan’s second-largest brokerage, plans to increase its revenue from Asia-related business to 160 billion yen ($1.8 billion) next fiscal year, one third of which coming from its capital markets business.
Revenue from Asia will rise to 30 percent of the group’s total in fiscal 2011 from 10 percent now, Chief Executive Officer Shigeharu Suzuki said in a statement today. Capital markets revenue from its Asia offices is expected to reach 53 billion yen, he said.
Suzuki is expanding investment banking and broking globally to fill the gap left after dissolving a 10-year-old joint venture with Sumitomo Mitsui Financial Group Inc. in December. The revenue target includes KBC Groep NV’s convertible bond and Asia equity derivatives units, which Daiwa earlier this month agreed to acquire for about $1 billion, he said today.
Daiwa is adding to its fixed-income and derivative operations in Asia and plans to acquire primary dealership and derivative licenses in Korea and India, Suzuki said. Separately, the company said today it hired Jung Insuk, who held a leadership position in fixed-income trading at Deutsche Bank AG, to run its South Korean bond business, and Ajay Marwaha to head its Indian bond business.
The brokerage, which reported revenue of 537.9 billion yen last fiscal year, reiterated plans to hire 300 more staff in the Asia-Pacific region by March 2012 for its derivatives and equities business.
Daiwa’s hiring costs this fiscal year will be about 10 billion yen and an additional 20 billion yen may be required later, Suzuki said, without giving a timeframe. He also repeated plans to hire another 100 people in the region for underwriting and mergers and acquisitions in next two years.
The company has hired more than 100 bankers, mainly for its equity and derivative units, since October, bringing total headcount in Asia to 850, it said in today’s statement. The new appointments include Ravi Narain, Jimmy Kan, Ricky Lo and May Tsang, all formerly Deutsche Bank AG employees, Daiwa said.
It expects to add 70 to 80 people to its Hong Kong office as part of the KBC acquisition, Suzuki said.
Daiwa also intends to raise more than 70 billion yen in capital for expansion in the region, the Tokyo-based company said in a presentation to analysts on May 17. Revenue from Asia, excluding Japan, was 14 billion yen in the fiscal year ended March 31, according to the presentation.