Nomura CEO: Potential to Cut $187m in Costs
Japan’s largest securities firm, Nomura Holdings, is on a mission to streamline its operations and boost profitability. CEO Kentaro Okuda shared during an investor summit that the company has identified ways to cut costs by an additional ¥28 billion in the near future.
This initiative is part of Nomura’s ongoing strategy to enhance return-on-equity and focus on lucrative business lines. So far, the company has seen a positive trend with six consecutive quarters of net profit growth up to September this year.
In addition to the current cost-cutting plan of ¥62 billion, Nomura is exploring opportunities to optimize its IT systems, offshore certain functions, and review office locations. Okuda emphasized the importance of consistent return-on-equity, aiming for 8% to 10%, by expanding low-risk businesses like underwriting and advisory services.
Nomura’s global wealth management division has experienced significant growth, tripling its assets under management in the past four years. The firm plans to leverage its expertise from this sector to enhance its Japanese wealth management arm.
Before diving into the strategic details, Okuda addressed a recent incident involving a former employee charged with serious crimes, including attempted murder and robbery. In response, he and other executives have voluntarily decided to take a salary cut for three months.
Earlier this year, Nomura faced penalties and lost its government bonds primary dealer status due to a bond trading market manipulation case. Despite these challenges, Nomura remains focused on its long-term goals of efficiency and profitability.
