Nomura Stumbles in New Global Push

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Nomura Stumbles in New Global Push

• By ALISON TUDOR

• Power Point Presentation
• By Team Deer
• Luke M
• Taylor K
• Anthony M
• Ibrahim A

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tension Over1-how quickly decisions are
made2- treatment of women in the
workplace.3-Executive compensation

• Overview

• Nomura Holdings Inc. acquired Lehman's
  international operations last September.
• Problems
• 1- Cultural Differences
• 2- Business Differences
• 3- Financial Problems

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Nomura Disclosed Wednesday

• Nomura closed with a profit for the first time in
  six quarters.
• They ended the first quarter on June 30th with a
  profit of 11.42 billion yen (121 million).
• This was a surprise to all of the analyst that
  figured they would loss more money again this
  past quarter.
• With the profit of the past quarter it allowed
  Nomura to jump revenue 41 up to 363.60 billion
  yen.

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Nomura going International

• "If we were a 100 domestic house, we would make
  a very good meal for either a Japanese megabank
  or, more importantly, anybody who counts in the
  international arena," says Takumi Shibata.
• After acquiring Lehmans operations from Europe
  and Asia, Nomura attempted to go into the U.S.
  during the 1990s, with very little success.
• Nomura took a hit of 600 million dollars only a
  few years into there operations in the U.S.
• As of late though U.S. officials have been
  looking to go for non- U.S. firms says a Nomura
  official.

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Nomura gaining respect

• Earlier last week, Nomura Securities
  International Inc. became a primary dealer for
  treasuries by the Federal Reserve Bank of New
  York.
• After recruiting for U.S. fixed-income and
  investment-banking, Nomura now has a head count
  of 855 compared to the 650 it had in September.

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Merging Troubles

• In finance people are the main assets to the
  business.
• Nomura tried to mix 8,150 American workers into a
  Japanese company.
• Many key Lehman workers such as Alexis de Rosnay
  left immediately after the merger. He was the
  co-head for Lehmans European investment banking.
• Lehman workers feared Nomura would have trouble
  making deals in the United States because they
  had only bought Lehmans European and Asian
  divisions.

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Controversy Within

• Lehman workers were guaranteed temporary top of
  the market bonuses. This was an effort to keep
  workers from leaving.
• Nomura workers were upset by this benefit given
  to merging Lehman workers but not to them. They
  had been loyal workers with more years in the
  company.
• Lehman division heads could make tens of millions
  of dollars a year compared to 250,000 a year
  that Nomura heads might make.

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Financial Problems

• Staff compensation doubled at Nomura to 161.8
  billion yen (December 31) compared to their
  previous quarter.
• The increased compensation mixed with the failing
  of the Japanese economy lead to financial problem
  at Nomura.
• Nomura had to start laying off employees to
  compensate for a decrease in business
  opportunities.

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Training Session

• Males and Females were trained separately at
  Nomura
• Women some of whom were Harvard graduates
• were taught how to wear their hair.
• serve tea and choose their wardrobes according to
  the season

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Business Etiquette

• New strict business etiquette for Lehman
  employees both male and female.
• Women
• No Highlighted hair.
• Sleeves no shorter than mid bicep.
• Avoid bright clothing.
• Nomura representatives believe clients and fellow
  workers feel more comfortable with a strict dress
  code.

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Integration throughout Nomura

• Nomura was trying to mix the culture of the
  Nomura side and Lehman side.
• Outside of Japan, the companies were mixed
  between a variety of nationalities.
• The problem was that the company was
  centered too much around Tokyo.
• They moved two people
• a) Head of Global Investment Banking, Hiromi
  Yamaji to London
• b) Head of Global Equities, Naoki Matsuba to New
  York

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• And also appointed Tarun Jotwani to Head of Fixed
  Income in Japan.
• -This resulted with Nomura setting up a team that
  traveled all over to help with the integration
  process.
• -The Lehman side complained about the Nomura side
  bankers because
• a) They would report to other executives after
  client meetings.
• b) The process with them was slower and more
  difficult
• c) Disagreements on how to categorize the
  clients

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The Good and Bad of Nomura

• It aims to cut costs by 10 in the current
  year.
• Laid off 50 bankers in Asia.
• In Europe, 100 Lehman employees left the
  company.
• The financial health has improved because
• a) A business boost in Asia.
• b) Increasing contributions from Europe.

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• Prior to the collapse, Lehman was atop the Stock
  Exchange in London.
• In December, they were 82nd
• On June 30th, they were 3rd place in terms of
  value of shares traded.
• Former employees get a guaranteed bonus and a
  select few get another but after that their
  bonuses will fall dramatically.

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• Sources
• Wall Street Journal
• Nomura Stumbles in New Global Push