Investor Day
Kentaro Okuda
Group CEO
Nomura Holdings, Inc.
May 12, 2021
Connecting Markets East & West
© Nomura
Enhancing risk management and business approach following incident in US
- Exited over 99% of positions (progressed from over 97% as of April 23 and now nearly fully exited)
- Implementing following initiatives and strengthening organization to support international strategy
Detail of actions (all completed or in progress)
Fact-finding investigation
Taking swift action
- Related departments conducted wide-ranging investigation of facts; Already implemented a number of preventative measures
- Audit Committee hired external law firm to conduct comprehensive, impartial review and a number of remedial measures have already been put in place
Responses completed/
being
Check and implemented strengthen
risk
management
framework Responses moving
forward
Leadership
- We conducted a full review of existing prime brokerage transactions and reviewed positions in other financing-related businesses, confirming no other similar transactions
- Review of risk management framework centered on Prime Brokerage business
- Conduct comprehensive review by third-party experts on risk management framework for Wholesale and Risk management
- Strengthen global risk controls (enhance Risk Management organization, deepen and expand scope of Wholesale risk monitoring conducted by committee comprising CRO/CFO/Head of Wholesale)
- Appoint new CEO at US subsidiary who has extensive experience in financial services in the US
- Enhance front office and risk management teams
Phase 1
Initial responses
Phase 2
Review prime brokerage risk
management framework
Phase 3
Comprehensive review of
Wholesale risk
management framework
Phase 4
Enhance global risk
governance
- Review of transactions with existing prime brokerage clients (review of large clients completed)
- Reviewed concentrated positions in non risk origination businesses (completed)
- Enhance monitoring of concentrated positions
- Revise margin rate table
- Enhance management of margin rates for individual transactions (approvals, etc.)
- Comprehensive review of risk management framework (internal review complete, upcoming external review)
- Enhance Risk Management org.
- Strengthen functions of committees
- Expand scope of portfolio testing beyond financing to other Wholesale businesses
- Promote understanding or subjective risk management among front office teams
Looking ahead
Management
strategy
Robust financial position
for provision of high-
quality services
(Mar 2021)
Continue with management strategy, in particular Wholesale strategy to build out businesses leveraging our global franchise, while enhancing risk management
- Further enhance our governance structure in line with global business strategy (increase the number of non-Japanese outside directors)
- Common Equity Tier 1 ratio of 15.7%
(minimum regulatory requirement is 7.51%)
- Liquidity portfolio of Y5.7trn (13% of total assets)
Strengthening | Strengthened US executive structure |
leadership | |
Future prime brokerage business
- Prime brokerage is an important client service that supports our overall Equities business including execution, block trades, derivatives and ECM
- Continue to offer prime brokerage services to support other businesses while enhancing risk management
1
Expanding our scope of business from public to private (1/2)
- Announced management vision of "Achieving sustainable growth by helping resolve social issues" towards FY2024/25
- To achieve this, we are taking strategic steps to expand our scope of business from public to private
Leverage our strengths in the public markets to enhance our presence in private markets
1 | |||
Private placements | |||
Alternatives | |||
• Private equity | 3 | ||
• Private debt | Digital | ||
• Project assets | |||
(infrastructure) | Products | Bespoke | |
Digital bonds, security | |||
token offerings | |||
Non-financial services | |||
services and | |||
Listed products | Current | ||
business | Mainly face-to-face | ||
and public | |||
(centered on | |||
offerings | high touch services | ||
public markets) | |||
Clients | 2 | ||
New investor base | |||
Mainly individuals, | |||
New needs of existing clients | |||
institutional investors, | |||
listed companies | Startups (unlisted companies) |
Provide customized services and solutions privately to each client
2
Expanding our scope of business from public to private (2/2)
- Continue to strengthen existing businesses with competitive advantage
- Actively allocate resources to new businesses including private with a view to the future
Private | Retail | WS | IM | New areas not under any specific division | |||||
Areas to enter/enhance | |||||||||
Advisory | Aircraft lease | Nomura Greentech | Private equity/debt | for future | |||||
Remote financial | |||||||||
consulting services | |||||||||
Domestic wealth management | International | Nomura Agri | |||||||
wealth management | Planning & Advisory | Search funds | |||||||
HNWIs and Corporates/owners | Nomura Navigation | Infrastructure and | Boostry | ||||||
power finance | |||||||||
OTC Derivatives | Private placement | Alliance with Jarden | Nomura SPARX | Security token | |||||
offering | |||||||||
Alliance with | Financial intermediaries | ||||||||
Mass affluent | Wealth Square | Level fee | (Alliance with | ||||||
Wolfe Research | |||||||||
regional banks) | |||||||||
Structured Finance | Sustainable finance | CIO services | |||||||
Credit | FX/Emerging | Contact center | LINE Securities | Komainu | |||||
Equities | ECM/DCM | ||||||||
Corporate transformation | China business | ||||||||
Rates | Public investment | ||||||||
trust | |||||||||
ESG investment | Financial intermediaries | ||||||||
Areas of | ETF | (Platform) | |||||||
competitive strength | |||||||||
New compared to existing business | |||||||||
3
Looking back on past year
- Seeing results from business platform rebuild launched two years ago and firmwide cost reduction program
- In May 2020, announced FY2024/25 management vision, now implementing strategic initiatives to expand our scope of business from public to private
April 2019 | May 2020 | July 2020 | January 2021 | April 2021 |
Investor Day | Investor Day |
Lay foundation
to move to
"next stage"
Announced
management vision towards FY2024/25
Expand business from public to private
Established Content Company
- Set up CIO Group for full-scale entry into high value-added advisory model
- Alliance with Wolfe Research, a US equity research boutique
Established Investment
Management division
Agreed on a strategic alliance with SPARX Group
- Establish Nomura SPARX Investment, Inc. a listed investment entity that invests in unlisted companies
Rebuild business platform | |
Retail | |
Core business | Channel reformation realignment |
| Branch office consolidation |
initiatives | |
Wholesale
- Review of business portfolio
- Allocate resources to core products
Total cost reductions of Y140bn
Expand business from public to private
Approaches by segment taken hold
Establishment of hybrid model effectively blending face-to-face and non-face-to-face approaches
Improve competitiveness of core products
Build global franchise capable of monetizing favorable market conditions
4
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Nomura Holdings Inc. published this content on 12 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2021 07:13:01 UTC.