Japan-based Nomura said the slump is due to a “costly program of expansion in the United States.”
When the brokerage bohemoth acquired the international business of Lehman Brothers in 2008, it didn’t secure a significant chunk of the American operation, but has been desperate to build it up since – something it tried and failed to do in the 80s, 90s and early 2000s.
Dealmaking is lagging behind hiring at the bank, and high overhead tied to hiring is eating into its margin as it waits for business to pick up.
Another factor sapping profit… is the decline in trading that hit the industry during the volatility of the summer, but has impacted Japan more than most markets. Local rivals of its brokerage business like Daiwa Securities and Sumitomo Mitsui have also reported a slide in gains.
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