Nomura's fixed income sales and trading business is not doing too well. The Japanese bank released its latest quarterly results today and it was all a bit bleak. The bank's traders made a 7.4bn yen ($67m) pre-tax loss in three months. Suddenly, all those trading layoffs make a bit more sense. Except that as well as laying people off, headhunters say Nomura has a curious interest in hiring.
Nomura didn't respond to a request to comment for this article. The Japanese bank's recent trading hires include James Konrad, Biagio Lapolla and Robbie Anderson in flow rates sales and trading, whom it poached in late June from Natwest Global Markets. Nomura also hired Dan Cohen, the former head of high yield trading at HSBC, who resigned from the bank in April.
Although three hires are inconsequential against the 50 staff said to have been put at risk in Nomura's London sales and trading unit, headhunters say they're not the end of the matter. Steve Ashley, head of Nomura's wholesales and global markets business, is said to be preparing to make further hires after the summer. "He's using this loss to layoff under-performers and bring in yet more new blood," says one headhunter. The hires from Natwest Markets are old colleagues of Ashley from his days as a top rates trader at RBS.
Meanwhile, the list of people put at risk at Nomura's London office is long and contains a lot of MDs and executive directors, not all of whom have been reported. They include the likes of Ceki Boz, an MD and head of rates options trading, Will Johnson, a gilts trader, Bala Arumugam, a Euro government bond trader, Peter Joos in hedge fund sales, Ioannis Sokos, a rates strat who only recent joined from BNP Paribas, Nick Oxlade, the head of European credit sales, James Ludlam, an emerging markets FX trader, Jalal Koubatim, a VP in emerging markets credit trading, Andrew Lofthouse, an executive director in central bank sales, and Renuka Fernandez, a senior rates strategist who joined in March 2017 from TD Securities. To name but a few.
Some Nomura traders have already found new jobs - Meraj Khan, a New York based MD who left the Japanese bank in July (possibly voluntarily), has just joined Standard Chartered.
Alongside more senior staff, Nomura is also understood to be jettisoning juniors in related areas. Headhunters say others put at risk include Peter McCallum, a junior European rates strategy analyst who joined after a summer internship in 2016, Anna Karina, an associate on the rates strategy team, Niv Vig, an associate level rates options trader who worked with Boz.
Many of these exits are genuine redundancies. Insiders say Nomura is scaling back in European rates trading after finding it hard to compete, but that the bank will continue to be active in the area and maintain a presence in gilts trading. The flow options business and the exotics options business are allegedly being combined. The second quarter loss is understood to have been a combined effort from the European rates, investment grade credit and emerging markets credit desks.
What next? After the recent losses, headhunters say Ashley's apparent interest in hiring yet more new people looks like a last throw of the dice. The bank's overseas operations were persistently loss-making before final turning their first profit in seven years in April 2017. After last year's heavy recruitment, the bank seems to have returned to its old ways. If Ashley does 'upgrade' with more new traders in the autumn, he'll need to convince his Japanese bosses that they'll actually make some money out of it.
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