Nomura eyes new strategy for growth

Mr Aoki's strategy is to ensure a more seamless collaboration between Nomura's key divisions. To spur growth amid the challenges, Nomura will launch its new Singapore- based Asia Infrastructure Project Office in August.
Mr Aoki's strategy is to ensure a more seamless collaboration between Nomura's key divisions. To spur growth amid the challenges, Nomura will launch its new Singapore- based Asia Infrastructure Project Office in August. PHOTO: DIOS VINCOY JR FOR THE STRAITS TIMES

Japanese financial giant Nomura is redoubling its efforts to strengthen the firm's position as Asia's global bank, in order to get back onto a growth track after a bumpy year.

These efforts include a recently announced move to open a Singapore office in August to support Asian infrastructure projects.

It will also entail greater collaboration between the firm's business divisions, Nomura's co-head of Asia ex-Japan Takeo Aoki said.

"The past financial year was a very challenging and uncertain business environment for us. Still, our macro-business, including foreign exchange and rates, is still doing well, so is our wealth management business," he told The Straits Times ahead of Nomura's Investment Forum Asia held here this week.

"My strategy is to ensure a more seamless collaboration between our key divisions, such as between wealth management, our global markets business and investment banking. The ideal scenario is a total removal of cross-functional barriers.

"This is something we need to do more as client needs are becoming more diversified. Many high-net- worth individuals also have financial assets and business needs across global markets, and we must serve them better especially in this still uncertain market."

Mr Aoki, formerly Nomura's Singapore head, was appointed as the firm's Singapore-based Asia ex-Japan co-head in April, just as the firm announced some disappointing results for the year ended March 31.

Revenue for the 12 months sank 10.7 per cent year-on-year to 1.7 trillion yen (S$21.6 billion), pushing net profit down 41.5 per cent to 131.6 billion yen. Its two core markets, Japan and the rest of the Asia-Pacific, were still profitable but earnings dropped. Profit from Japan slumped 32.6 per cent to 244.8 billion yen, and the rest of the region pulled in 19.8 billion yen, down 42.8 per cent.

While much of the slowdown was due to market volatility in the second half of the financial year, Mr Aoki agreed that Nomura is also facing stiff competition from both global and domestic players in Asia.

To seek growth amid these challenges, Nomura will launch its new Singapore-based Asia Infrastructure Project Office in August.

"We will offer both advisory and financing support to small to mid- sized infrastructure projects, with a focus on South-east Asia. Discussions with clients and governments in countries such as Singapore, Malaysia, Indonesia, Thailand, the Philippines, Vietnam and Cambodia started late last year," Mr Aoki said.

Nomura's entry into the regional infrastructure segment is not surprising, given that Japan is one of the world's primary sources of infrastructure investment funds.

Growing its global presence is still important, with Nomura having just spent some US$1 billion to acquire a 41 per cent stake in mutual fund manager American Century Investments in December. But Nomura's dominance in Japan and its ability to link the robust investment needs from the country with the rest of world will always remain its biggest competitive edge, Mr Aoki noted.

Last year, Nomura was the bookrunner for Japan Post's US$12 billion initial public offering, the biggest deal globally in 2015. The bank also advised Itochu Corporation and Thailand's Charoen Pokphand Group in their joint US$10.4 billion investment in China's Citic.

"I am fully aware that Nomura needs to do more in the rest of the world, but we can achieve this by going back to the fact that we are still the No. 1 player in Japan, and the platform for investments to and from the country," he said.

A version of this article appeared in the print edition of The Straits Times on June 07, 2016, with the headline 'Nomura eyes new strategy for growth'. Print Edition | Subscribe