Japanese brokerage Nomura cuts European exposure
Published 29/11/2011 | 05:00
Japan's largest brokerage has reduced its assets linked to Greece, Ireland, Italy, Portugal and Spain by 75pc since September.
Nomura Holdings cut the value of debt, derivatives and counter-party agreements in those nations by the end of last week from $3.55bn (€2.66bn) as of September 30.
The total for Italy was reduced by 80pc, a source said.
The total for Italy was reduced to $467m as of November 24 from almost $2.82bn, according to a statement posted on the Tokyo-based company's website yesterday.
The securities firm cut the value of assets linked to Spain by 62pc from September 30 to $175m, while Greece's was cut 43pc to $27m, it said.
Investors have driven Nomura's shares down 53pc this year as losses from overseas operations mounted on concern that the Tokyo-based brokerage's European holdings may lead to wider losses.
Nomura is cutting jobs and slashing costs by $1.2bn to avert a potential downgrade by Moody's Investors Service.
The bulk of Nomura's holdings were in Italian government debt. Nomura spokeswoman Joey Wu said the reduction reflected both the maturing of securities and a sale of others in reaction to instability in financial markets.
Nomura would continue to act as a market-maker in Italian government debt and had no plans to pull out, she said.
The debt crisis in Europe has increased pressure on Nomura to put the brakes on its global expansion, which has included its purchase of the Asian and European businesses of failed Wall Street bank Lehman Brothers in 2008.
Earlier this month, Nomura posted its first quarterly loss in two-and-a-half years and tripled a cost-cutting target to $1.2 bn, with about 60pc of the cuts to come from its loss-making European operations.
Banks around the world are sounding their loudest warnings yet that the euro area risks unraveling unless its guardians quickly intensify efforts to beat the debt crisis. Economists from Morgan Stanley, UBS AG, Nomura and other banks have said that governments and the European Central Bank must step up their crisis response.
Shares of Nomura rose 4.4pc to 240 yen in Tokyo Stock Exchange trading , while Japan's Topix Index advanced 1.3pc.