By Anton Bridge

Nomura Holdings Cost-Cutting Strategy

TOKYO (Reuters) – Japan's largest securities firm Nomura Holdings (NYSE:NMR) plans to cut costs by an additional 28 billion yen ($187 million) in the short- to medium-term, as stated by CEO Kentaro Okuda during an investor summit on Tuesday.

This cost-cutting strategy is part of Nomura's multi-year plan aimed at enhancing return-on-equity and concentrating on stable, high-profit business lines. This approach has resulted in six consecutive quarters of net profit growth up to the end of September this year.

Nomura's existing plan already includes a cost reduction of 62 billion yen ($414 million). This includes initiatives like optimizing information technology across the group, offshoring certain functions, and reviewing office locations.

Okuda noted that the firm is making steady progress towards its goal of a consistent return-on-equity between 8% and 10%, set last May, by expanding its risk-light businesses, including underwriting and advisory services.

A key component of this strategy is Nomura's global wealth management business, which has expanded its assets under management threefold in the last four years. This unit offers brokerage, asset management, and loan products, and hopes to leverage its global expertise in Japan’s wealth management sector.

Okuda expressed apologies for the troubles caused by a former Nomura employee charged with multiple crimes, including attempted murder and robbery. This individual had provided asset management advice and was suspected of robbing a client, leading to a fire at their home in July. In response to the incident, Okuda and other executives will undergo a voluntary salary cut for three months.

Earlier this year, Nomura faced a 21.8 million yen fine from Japan’s banking regulator related to a bond trading market manipulation case, temporarily losing its status as a primary dealer of government bonds.

($1 = 149.9200 yen)