Nomura Holdings Inc. plans to set up a retail brokerage business in China and is open to making acquisitions in the U.S. to bolster its investment banking operations there, Reuters and Bloomberg News reported Dec. 28, citing CEO Koji Nagai.
The Japanese company is ready to establish a retail brokerage business in China as soon as the country's regulators allow foreign firms to open securities brokerages there, Nagai said. For now, the company offers wholesale brokerage services to businesses in China and has a retail brokerage business in Hong Kong that offers services to wealthy Chinese.
Nagai believes a retail brokerage operation in China will allow it to target the country's growing affluent class. However, he noted that the planned business will take time before it becomes profitable, and expects that to happen in five to 10 years at the earliest.
Nagai's statement came after China in November announced plans to remove limits on foreign ownership limits in banks and asset management companies, and loosen ownership restrictions at securities joint ventures and insurance companies.
Meanwhile, Nomura is open to acquiring brokerage firms in the U.S. to grow its presence there. Nagai said the company could pursue both organic or inorganic growth opportunities in the U.S. He added that the company does not plan to compete with large global financial institutions in the U.S., but will connect its U.S. operations with those in Europe and Asia.
In addition, Nomura may consider reducing its headcount in Europe since fee income per employee there is well below the Americas. Nagai said the company will make a decision on reducing headcount in Europe and adding more staff in the U.S. after considering market environment and profitability.