Watanabe departure likely to end Nomura's global push
A series of missteps amidst a volatile banking environment, combined with an insider trading scandal, have left the CEO of Japan’s largest investment bank with no choice but to resign. July 30, 2012 | Lalitha SivanesanNomura’s CEO, Kenichi Watanabe, has resigned, together with COO Takumi Shibata. Both executives will step down to take responsibility for the insider trading scandal that is currently engulfing Japan’s biggest investment bank. Earlier in the year, Japanese regulators determined that Nomura employees leaked information on share sales that the bank conducted for Mizuho Financial Group, Inpex and Tokyo Electric Power to traders who cashed in on the information before the offerings were announced in 2010. Watanabe has served as the bank’s CEO four for years, and will be replaced by Koji Nagai, president of Nomura’s domestic brokerage unit. The bank had to undertake its biggest management reorganisation in 15 years after attempts to placate clients and regulators by an initial CEO pay cut and penalising junior executives for the leaks failed. Watanabe and Shibata were responsible for the $225 million purchase of Lehman Brothers’ European and Asian assets, quoted as a “once-in-a-generation opportunity” by Watanabe at the time. Unfortunately, the deal has yet to generate any profits for the company until now. Former Lehman units are still in the red, contributing to an exodus of Lehman executives, including Jesse Bhattal, who quit as head of Nomura’s global wholesale banking. Watanabe also witnessed an 83% slump in Nomura’s stock during his tenure. The bank now has a capitalisation of $12.3 billion, down from $76 billion in 1987. The bank’s stock has also dropped by more than 80% since he assumed the CEO’s post in April 2008. To cope with Basel III requirements and a steep drop in profits, the bank had also sold new shares twice to boost capital, and cut dividends. A $1.2 billion dollar cost-cutting plan was introduced by Watanabe late last year, which resulted in the elimination of 1,300 employees worldwide. In March 2012, Moody’s cut Nomura’s credit rating to the lowest investment, justifying its action by question... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Asset Management, Trustees and Custodians, Japan, Markets & ExchangesTrustees Custodians and Depositories,Japan,Markets Exchanges, Asset Management, Trustees and Custodians,Japan,Markets & Exchanges, Keywords:Nomura, Kenichi Watanabe, Koji Nagai, Lehman Brothers Nomura, Kenichi Watanabe, Koji Nagai, Lehman Brothers
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