Nomura Said to Maintain Profit Abroad After Cutting 900 Jobs (2)

(Bloomberg) -- Nomura Holdings Inc. is poised to report a second straight quarter of profit from overseas as it boosted revenue from fixed-income trading and trimmed costs after completing job cuts, said people with knowledge of the matter.

Japan’s largest brokerage had a pretax profit from operations abroad in the three months ended Sept. 30, rebounding from a loss of 45.8 billion yen ($438 million) a year earlier, said the people, who asked not to be identified. It eliminated about 900 jobs in Europe and the Americas as part of a restructuring announced in April, according to the people.

Shedding a legacy of losses abroad could help Chief Executive Officer Koji Nagai convince investors of the merits of having a global footprint. Tokyo-based Nomura began cutting jobs and shrinking operations in Europe and the Americas six months ago to save about $700 million and stem six years of losses outside of Japan.

It wasn’t clear how large a profit Nomura recorded from its operations outside Japan in the fiscal second quarter. The company posted overseas pretax earnings of 16.9 billion yen in the previous three months, ending three straight quarters of losses.

Most of the 900 employees have already left the brokerage, though payrolls for some workers will continue during the current quarter, one of the people said. Nomura’s Tokyo-based spokesman Kenji Yamashita declined to comment. The brokerage is scheduled to announce its earnings at 3 p.m. in Tokyo.

Global securities firms such as Morgan Stanley are benefiting from a rebound in bond trading. For Nomura, that may help to ease pressures on its domestic retail brokerage business, which until recently had been the mainstay of its profit. It faces increasing competition with major banks for business from Japanese who are becoming more reluctant to invest, as interest rates plunge and a stronger yen clouds the outlook for stocks.

Shares of Nomura rose 0.4 percent at 12:48 p.m. in Tokyo, paring this year’s decline to 27 percent. The benchmark Topix index fell 0.2 percent, and is down 11 percent in 2016, heading for its first drop in five years.

(Updates with previous quarter’s overseas profit in fourth paragraph.)

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net. To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Russell Ward, Peter Vercoe

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