Nomura’s China losses narrow as brokerage seeks turnaround

Nomura Holdings posted a smaller loss at its joint venture in China last year, as the brokerage seeks to turn around the business in the face of slowing growth and trade tensions.

Net loss at Shanghai-based Nomura Orient International Securities narrowed 30 per cent to 128.7 million yuan (S$23 million) in the year ended Dec 31, a statement showed this week, marking the second straight year of improvement.

Nomura’s majority-owned venture with Oriental International (Holding) and Shanghai Huangpu Investment Holding (Group) has continued to lose money since its inception in late 2019. Despite last year’s improvement, credit impairment losses more than doubled, it said.

The unit has been undergoing an overhaul after its initial ambition to grow the wealth management business veered off track during the pandemic. It has shifted its priority to expanding in areas including research and trading, while it is seeking a new chief executive officer, Bloomberg reported this month.

The venture said it expects China’s economic growth to slow this year as exports come under pressure from the Trump administration’s trade policies. It will seek to generate stable and positive returns from proprietary trading in anticipation of more monetary easing in China, according to the statement.

“We continue to work with our JV partners to make our business in China profitable,” Nomura said in a statement, declining to comment further.

Headcount at the venture fell to 208 last year from 246 a year earlier. When it started, the firm had targeted raising its employee numbers to 500 by 2023.

China makes up a relatively small part of Tokyo-based Nomura’s international business, even as Asia’s largest economy was once a pillar of the firm’s growth strategy. Chief executive officer Kentaro Okuda instead identified India and the Middle East as growth regions in a presentation released about a year ago, without mentioning China.

Nomura’s losses in China contrast with profits for the broader Asia region. Pretax profit from Asia and Oceania, excluding Japan, more than doubled to 52 billion yen in the 12 months ended Dec 31, according to filings. BLOOMBERG