Nomura To Cut $1 Bln In Cost By March 2014: Reports

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8/31/2012 9:28 AM ET

Japan's largest brokerage firm Nomura Holdings, Inc. (NMR: Quote) is looking to cut costs additionally to the tune of $1 billion over the next 19 months, primarily by eliminating jobs overseas, reports said Friday.

The reductions will focus on Nomura's struggling international wholesale division, which saw the implementation of a $1.2 billion cost reduction plan late last year also.

Reports also said the company is also looking at significant cuts to its equities trading business and some overseas operations, particularly in Europe. Its overseas operations have incurred losses for nine consecutive quarters.

Nomura Holdings is currently in the process of rebuilding itself under the new management team that was formed following an insider-trading scandal in June.

Regulators had found in June that Nomura Holdings had engaged in insider trading in connection with an equity offering by Tokyo Electric Power Co. in September 2010. Nomura was the underwriter for the offering. Non-public information was leaked by Nomura employees.

Nomura's new Chief Executive Koji Nagai reportedly said the company would cut $1 billion from its wholesales business by March 2014, and that the company is aiming to post a 250 billion yen pretax profit for the year ending March 2016.

Nagai is expected to reveal more details of his cost cutting plans on September 6, when he speaks to investors and analysts.

Nearly a year ago, Nomura had announced plans to cut about 5 percent of their workforce in Europe in order to reduce costs as its wholesale businesses continued to face pressures due to the European debt crisis.

Nomura had acquired Lehman Brother's former operations in Europe and Asia in 2008 during the global financial crisis in late 2008. The brokerage also offered hefty pay packages for many former Lehman bankers.

In July 2012, Nomura Holdings reported that net income attributable to shareholders for the first-quarter declined 89 percent to 1.9 billion yen from 17.8 billion yen a year ago. Nomura lost about 16 billion yen in Europe, while its U.S. operations have posted profits in the last three quarters.

NMR closed Thursday's regular trading session at $3.19, down $0.05 on a volume of 0.41 million shares. In the past 52-week period, the stock has been trading in a range of $2.91 to $4.93.