Nomura Holdings which is Japan’s biggest brokerage and banking group recently announced that it is planning to expand its forex services in the United States.
Their corporate clients in the US can expect expanded services including acquisition finance, the arrangement of forex hedging and more.
This expansion is in line with the company’s plan to expand its global focus while trying to avoid any undue risks in its expansion process.
Our key words are ‘America‘, ‘corporate clients‘ and ‘solutions business‘. Rather, our focus is on advisory and primary business, which are not subject to market risks to the same degree and do not use our balance sheet much. In addition, we will expand our solutions business such as acquisition finance and foreign currency exchange services for deals we advise on.
Koji Nagai, CEO of Nomura
However, Nomura’s main global markets business will not be expanded. This is mainly because they deal in fixed income and equity trading. Though very profitable for the company, they are also very risky.
America is currently the company’s main focus because the region has the highest banking fees in the world. Nagai hopes that this will generate profits for the company’s struggling overseas operations.
Boost In Revenues
Nagai predicts that their expansion into the US market will be profitable for the company. He hopes to generate a minimum of $250 million in revenue from the new business in the region as their efforts mature. Should this turn out to be the case, it would be a big boost for Nomura. For the past three quarters, the company has been experiencing losses before taxes in its overseas businesses.
According to reports, from March to September, Nomura reported net revenue of ¥554.9 billion. This is equivalent to $5 billion. That is a lot of money and that is only half of Nomura’s 2019 fiscal year. While the numbers do come across as impressive, it is still a decline of 22 percent when compared to the same period last year.
These numbers haven’t discouraged the company and Nagai pointed out that Nomura is dedicated to keeping up its foreign business presence. He confirmed that the company will keep their global platform up and running despite the drop in profits. He points out that the Nomura is restructuring their global approach and shrinking businesses that their clients no longer require.
