Nomura logs biggest quarterly loss in over a decade on $3b Archegos hit

TOKYO • Nomura Holdings, Japan's biggest brokerage and investment bank, yesterday reported its biggest quarterly net loss since the 2008 global financial crisis, after taking a 245.7 billion yen (S$3 billion) hit from the collapse of American investment fund Archegos.

Its January-March net loss came in at 155.4 billion yen, against a 34.48 billion yen loss a year earlier when global stock markets were battered by the Covid-19 outbreak.

Before Archegos failed to meet margin calls on heavily leveraged stock bets last month, Nomura had been on track to register a record annual profit, bolstered by a buoyant United States trading business. That was set to have been a hard-fought victory in its decade-long, stop-start efforts to successfully expand outside Japan.

Instead, it posted a net profit of 153.1 billion yen, down 29 per cent from the previous year. Most analysts had expected a profit of between 160 billion and 225 billion yen, according to Refinitiv data.

Nomura's Archegos loss, which is slightly larger than the previously flagged US$2 billion (S$2.6 billion), is the second-worst after that of Credit Suisse. The Swiss bank booked a 4.4 billion franc (S$6.4 billion) hit from Archegos in the January-March period and expects further losses of about 600 million francs this quarter.

Morgan Stanley lost nearly US$1 billion, while Goldman Sachs Group and Deutsche Bank exited without losses, Reuters and other media outlets have reported.

REUTERS