Nomura to cut staff in savings bid

Nomura trims staff numbers in its Dubai-based investment banking arm by a third as deals prove hard to come by.

Nomura, a Japanese investment bank that once had aspirations of becoming a global deal-making powerhouse, is to cut a third of its investment banking staff in the Arabian Gulf amid a dearth of transactions.

The bank, based in Tokyo, is cutting its investment banking division staff from 12 to eight, according to two people familiar with the matter who wished to remain anonymous.

Nomura is in the midst of a US$1 billion (Dh3.67bn) savings drive, the bank said in its latest quarterly earnings statement.

"Investment across Europe, the Middle East and Africa as a whole will be affected as part of the additional cost-cutting programme that they have announced," one of the sources said.

The bank's Middle East equity research was closed last year. Nomura's trading desk is said to be unaffected by the latest round of cuts.

Koji Nagai, Nomura's newly appointed chief executive, is attempting to slim the bank's costs after its most recent quarterly net income fell 89 per cent to ¥1.9bn (Dh89.3 million), compared with the same period a year earlier.

Nomura's Middle East investment banking division was originally acquired as part of a carve-up of the defunct investment bank Lehman Brothers, which collapsed in September 2008.

Nomura took the bank's Asian, European and Middle East arms, while Barclays acquired Lehman's North American assets.

Debt-focused investment banks have had a good year in the Gulf, with $28bn of bonds sold during the year so far.

The majority of sales have been Islamic bonds.

Despite soaring interest in Middle East credit from Asian investors, Nomura's only participation in the debt markets this year has been a bond from Qatar Petroleum worth ¥85bn, known as a "samurai bond" because it is denominated in yen.

Alongside the reduction in investment banking staff, the bank has increased its focus on the Saudi Tadawul and established a rates and foreign exchange team in its Dubai office.

Amid tensions in the Dubai International Financial Centre, lenders including Bank of America Merrill Lynch and Emirates NBD have cut staff this year.

Deutsche Bank said this week it had made job cuts in some departments of about 5 per cent, although it had increased resources in other areas in line with "normal business practice".