Brokerage giant Nomura posts loss of $2.3 billion from trades tied to Archegos
Written by tokyoclub on April 27, 2021
Nomura Holdings Inc. on Tuesday posted a loss of $2.3 billion from trades tied to U.S. investment firm Archegos Capital Management in the business year ended March.
Nomura said the loss from the U.S. transaction will further dent its profit by roughly 62 billion yen ($572 million) in the year through March 2022.
Supplied image shows a logo of Nomura Holdings Inc. (Kyodo)
Japan’s biggest brokerage posted a net profit of 153.12 billion yen in the reporting year, sinking 29.4 percent from a year earlier, on net revenue of 1.40 trillion yen, up 8.9 percent.
Nomura said the loss is linked to trades with a “U.S. client,” but people with knowledge of the matter said it is Archegos, which is known to have triggered turmoil after failing to meet margin calls from the Japanese brokerage, Swiss bank Credit Suisse and others, following a devaluation of its securities holdings.
In March, the parent company of Nomura Securities Co. warned of a possible loss of approximately $2 billion due to the issue.
“We want to fulfill our responsibility by strengthening risk management,” Nomura President and CEO Kentaro Okuda said at an online press conference.
Nomura said it is not planning major changes in its business strategies, including those in the United States following the loss, adding its relationships with so-called family offices managing wealthy individuals’ assets will continue.
Nomura Chief Financial Officer Takumi Kitamura said 97 percent of the position adjustment related to the incident was completed as of Friday. He said the case was a “highly individual and special case” and found no other businesses with similar risks as of this moment.
Credit Suisse, which also warned in March of a possible significant loss, reported Thursday a net loss of 252 million Swiss francs ($275 million) for the first quarter.