|Bid||3.4200 x 2200|
|Ask||3.4300 x 1200|
|Day's Range||3.4100 - 3.4500|
|52 Week Range||3.0500 - 5.1000|
|Beta (3Y Monthly)||1.42|
|PE Ratio (TTM)||12.43|
|Forward Dividend & Yield||0.06 (1.64%)|
|1y Target Est||3.87|
(Bloomberg) -- A Nomura Holdings Inc. unit will repay customers about $25 million to settle U.S. regulators’ allegations that it failed to supervise traders who made false statements in negotiating sales of mortgage securities.The New York unit didn’t adequately monitor traders who lied to clients about the prices the firm paid for bonds and the amount of profits the traders would receive, the Securities and Exchange Commission said in a Monday statement. In some cases, the traders even misled customers about who owned the bonds, pretending that they were negotiating with a third party when, in fact, Nomura already had possession of the assets.The former Nomura Securities International Inc. traders, who sold commercial and residential mortgage-backed securities, engaged in the illegal conduct from 2010 to 2014, according to the SEC. The RMBS traders involved included ex-managing director Ross Shapiro and senior traders Michael Gramins and Tyler Peters. Former co-heads of CMBS trading James Im and Kee Chan were also named by the SEC. All were previously sued by the regulator.Read More: Ex-Nomura Traders Charged Over Inflated Mortgage Bond Sales“Firms acting as dealers in opaque markets like those for CMBS and RMBS must take steps to prevent misleading communications with their customers,” Daniel Michael, head of the SEC enforcement’s complex financial instruments group, said in a statement.The SEC has been focused on pricing in opaque markets for bonds backed by mortgages ever since the 2008 financial crisis. The regulator has uncovered a wide swath of infractions from brokers engaging in misconduct to hedge fund managers inflating their investment returns.Nomura will pay $20.7 million to affected RMBS customers and $4.2 million to CMBS clients and an additional $1.5 million in penalties to the SEC. The amount being paid reflects Nomura’s “substantial cooperation,” the SEC said.Yoshitaka Otsu, a Tokyo-based spokesman for Nomura, declined to comment.Shares of Nomura fell 0.7% in Tokyo morning trading Tuesday, in line with a drop in the Topix index.Read More: Bond-Trader Crackdown Stalls, But Wall Street May Never Be SameShapiro, the former managing director, was barred from the industry by the SEC in October 2018 with the right to reapply after two years. The agency’s civil cases against Gramins and Peters are pending. Chan has settled with the SEC, while Im is fighting the regulator’s allegations.Shapiro, Gramins and Peters were also criminally charged by the Justice Department. After a 2017 trial, Gramins was the only one found guilty, though on just a single count. Gramins was facing a retrial later that year but a judge rejected the government’s charges after a federal appeals court overturned the conviction of former Jefferies Group LLC bond Trader Jesse Litvak, who had been accused of similar allegations. Prosecutors are appealing the Gramins ruling.(Corrects description of criminal case against Gramins in last paragraph of story originally published July 15.)\--With assistance from Takashi Nakamichi.To contact the reporter on this story: Matt Robinson in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Jesse Westbrook at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Nomura Holdings Inc will pay $26.5 million to settle U.S. Securities and Exchange Commission charges that it failed to properly supervise five former traders who lied to customers about mortgage bond prices. The accord relates to allegations that the traders misled customers about prices at which they bought bonds, understated the profit Nomura stood to make and sometimes pretended they were still negotiating to buy bonds that Nomura had already purchased. Without admitting wrongdoing, Nomura agreed to pay $1.5 million in civil fines and make $25 million of restitution to customers who bought and sold commercial and residential mortgage-backed securities from roughly 2010 to 2014.
Nomura faces an aggressive challenge to its core retail business, as Japan’s five biggest online brokerages plan to put the country’s deepening pension crisis at the heart of a new push for customers. The online brokerages, including kabu.com and Rakuten Securities, are plotting a joint marketing campaign, say people closely involved, following a report last month from Japan’s regulator warning that the average elderly couple would require about ¥20m ($185,000) on top of the state pension for their retirement. The idea for a joint marketing campaign had emerged from a five-way meeting in early July held by the founders of the five online brokerages, according to people involved in the talks.
Foreign firms are set to benefit as China plans to end all ownership limits within its financial sector a year earlier than previously stated.
(Bloomberg) -- Nomura Holdings Inc. Chief Executive Officer Koji Nagai, who narrowly escaped an attempt to oust him last week, now faces the challenge of demonstrating to credit-rating companies that his latest turnaround plan will succeed where two previous efforts failed.S&P Global Ratings said it’s monitoring Nagai’s effort to cut about $1 billion of costs for any signs of falling behind schedule, while Moody’s Investors Service said a failure to improve profitability would put downward pressure on Nomura’s credit rating. Both have negative outlooks on the firm.While they stopped short of signaling imminent action, any downgrade could undermine Nagai’s efforts to revive Nomura’s money-losing operations abroad because his plans hinge in part on deepening ties with corporate clients and institutional investors.“Lower credit ratings would raise Nomura’s funding costs, reduce the number of counterparties willing to deal with it and make it harder to attract the quality of customers and staff they need to succeed overseas,” said David Marshall, co-head of Asian bank research at CreditSights Inc. in Singapore.S&P may cut Nomura’s credit score from A-, four levels above junk territory, if its overhaul stalls, analyst Toshihiro Matsuo said in an interview. Moody’s rates the Tokyo-based bank Baa1, the third-lowest investment grade.Nomura’s rating could improve if its overhaul, including the $1 billion cut to wholesale business costs and the reduction of branches in Japan, stays on track, Matsuo added.“Our client base remains strong, and we have a high level of core capital and liquidity,” Nomura said. “We remain committed to prudently managing risk, while transforming our business model and reviewing our cost base to further improve profitability.”Nagai, 60, was re-elected to the board last week with only 61.7% of shareholders’ votes, after an influential proxy adviser urged his ouster over an information leak. In past years since taking the post in 2012, he obtained more than 90% support even after cost-cutting plans failed to sustain a profit recovery overseas.S&P “needs to look critically” at Nomura’s overhauls after the previous unsuccessful rounds of restructuring, said Matsuo, who became the ratings firm’s main analyst covering the brokerage in April. “If it becomes clear to us that they won’t be able to achieve the goals they have set themselves, that could naturally work negatively to their creditworthiness.”Despite its challenges, Nomura’s credit rating at S&P is one grade higher than Deutsche Bank AG’s and the same as that of domestic rival Daiwa Securities Group Inc.Moody’s changed its outlook on Nomura’s credit rating to negative from stable last November, citing the firm’s “weaker and increasingly more volatile profitability.”The rating would face downward pressure if Nomura can’t improve its return on assets without increasing balance-sheet risk, Moody’s analyst Shunsaku Sato said in an emailed response to questions.Conversely, the outlook could return to stable if the firm improves the profitability of its domestic wholesale and retail businesses and limits losses abroad -- all without increasing its risk profile, Sato said.To contact the reporters on this story: Takashi Nakamichi in Tokyo at firstname.lastname@example.org;Takako Taniguchi in Tokyo at email@example.comTo contact the editors responsible for this story: Marcus Wright at firstname.lastname@example.org, Russell WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Nomura Holdings Inc.’s under-fire chief executive won a shareholder vote on Monday, surviving a call for his ouster from the board following an information leak.CEO Koji Nagai was reappointed at an annual shareholder meeting alongside nine other nominees proposed by the company, Japan’s biggest brokerage said in an emailed statement. The vote was held almost a week after Nomura announced several moves to placate investors following the leak and recent losses, including governance changes and a $1.4 billion stock buyback.But those reforms -- particularly tweaks to how it selects its top executives -- are also likely to weaken the influence of management over who eventually succeeds Nagai, the bank’s longest-serving CEO in three decades.By stripping Chairman Nobuyuki Koga of his role as head of the key nomination committee in favor of an external director, Nomura may break from the traditional way that Japanese financial firms choose their leaders when the time comes for Nagai to step down. That could be just what the loss-making brokerage needs to meet its long-term challenges, according to Morningstar Inc. analyst Michael Makdad.“Rather than Nagai or Koga having a large say in who will be the next CEO, Nomura will try to have a selection process that is as independent as possible,’’ Makdad said. “It is possible the company would choose a candidate open to a broader range of strategic moves than if it chose a protege of Nagai who might defer to some degree to the opinions of former CEOs.’’Like most of its Japanese peers, Nomura has tended to choose its CEO from a close circle of senior executives who are groomed by management after rising through the ranks. Now more of that responsibility will fall to outside director Hiroshi Kimura, a former Japan Tobacco Inc. chief.Revelations last month that employees leaked market-sensitive information led to regulatory penalties and prompted proxy advisory firm Institutional Shareholder Services to recommend voting against his reappointment.Emiko Iwabuchi, a 70-year-old Tokyo resident who holds Nomura shares, said the incident was discussed at the meeting and the bank should do more to prevent a recurrence. “You shouldn’t make your investors worry,'' she said. ``I want them to do better at educating their employees.”Read more on ISS’s stance against NagaiShares of Nomura closed 0.3% higher in Tokyo. The stock was trading near a six-year low before the buyback announcement triggered an 11% jump last Wednesday. It has still lost 30% over the past 12 months, and trades at less than half the book value of its assets.Nomura isn’t the only Japanese company facing difficult shareholder meetings this season, as the government’s corporate governance reforms give investors a bigger voice. Nissan Motor Co. faces opposition to its CEO’s reappointment after the arrest of former Chairman Carlos Ghosn, while activist shareholders are pressing for change at housing materials maker Lixil Group Corp. and rail operator Kyushu Railway Co. Read more about Lixil’s tussle with a shareholderNow that Nagai has been re-appointed, his immediate priority will be to implement his plans to cut costs at its struggling global wholesale operation and shut retail branches at home following the company’s first fiscal-year loss in a decade. In an April interview, he signaled that he may step down before the completion of the three-year overhaul as long as it goes smoothly.The jury is still out on whether his eventual successor can address Nomura’s difficulties in an industry that’s grappling with big changes, said Travis Lundy, a special situations analyst who publishes on Smartkarma.“It could be good for Nomura to be influenced by an outsider,’’ Lundy said. “The question would really be whether an outsider could do it better. It is a tough business.’’Below are key personalities on Nomura’s board following the governance changes.Koji NagaiNagai, 60, is Nomura’s longest-serving CEO in more than three decades, having begun his stint in August 2012 after predecessor Kenichi Watanabe resigned in the wake of an insider-trading scandal. A former chief of the domestic brokerage unit, Nagai has tried several times to turn around the company’s struggling overseas business, with little success. The bank has only posted profits abroad in one year under his leadership. He unveiled his third major cost-cutting program in April.Nobuyuki KogaKoga, 68, has been chairman since June 2011. He was CEO for five years until 2008, during which his efforts to expand in the U.S. were stymied by the onset of the subprime mortgage crisis that prompted him to shutter a home-loan business there. He handed the reins to Watanabe, who presided over the firm’s fateful acquisition of Lehman Brothers Holdings Inc. businesses in Europe and Asia later that year.Hiroshi KimuraKimura, 66, has been an outside director since June 2015. He spent his career at Japan Tobacco, the government-owned cigarette giant, where he was CEO from 2006 to 2012 and then chairman until 2014. Japan Tobacco made a series of overseas acquisitions under his leadership as tax increases and an aging population damped demand at home. He survived calls for his ouster in 2011 by Children’s Investment Fund Management UK LLP, a London-based hedge fund.(Updates with shareholder's comment in the eighth paragraph)To contact the reporters on this story: Takashi Nakamichi in Tokyo at email@example.com;Takako Taniguchi in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Marcus Wright at email@example.com, Russell WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Japan's Nomura Holdings Inc won shareholder approval on Monday for the re-appointment of its chief executive officer, overcoming concerns about the leaking of market information and its first annual loss in a decade. CEO Koji Nagai kept his job despite opposition from influential proxy advisory firm Institutional Shareholder Services Inc, which had recommended shareholders vote against his re-appointment. The vote was in effect an endorsement of Nagai's efforts to turn around the investment bank, which reported an annual loss in April and said it would not pay out bonuses to directors.
Nomura (NMR) announces that it will reduce its stake in an affiliate and use the proceeds to buy back shares worth $1.4 billion.
Japan's financial watchdog on Tuesday ordered Nomura Holdings to improve its business practices after the country's biggest brokerage admitted an employee had leaked market information. The Financial Services Agency said it had issued one of its "business improvement orders" against Nomura, a regulatory punishment that requires firms to submit a plan detailing how they will improve internal controls. Nomura on Friday confirmed that information related to listing and delisting criteria now under review by the Tokyo Stock Exchange had been handled improperly.
The chief executive of Nomura Holdings will take a 30% pay cut for three months over its improper handling of market information, marking the latest headache for CEO Koji Nagai, as he struggles to turn around the Japanese investment bank. The incident comes a month after Nomura reported its first annual loss in a decade and said it would not pay out bonuses to directors. Nagai, under pressure as Nomura wrestles with a restructuring plan that includes cutting $1 billion in costs from its wholesale business, told a news conference that he accepted responsibility for the information leak but would not step down.