NOMURA signalled a full-scale retreat from its ambitions to become a top-tier international investment bank yesterday as its head of wholesale, Jasjit (Jesse) Bhattal, announced he is quitting the industry.
While the bank’s plans to downsize its global operations were well-known, the departure of Bhattal, who moved to the bank when it bought Lehman Brothers’ European and Asian operations, is highly symbolic.
Bhattal had been charged with pushing the bank up the league tables, but it has struggled to gain traction in a shrinking market and lost $950m (£614m) in the third quarter of last year, pushing the group to a loss.
Bhattal’s move means that Nomura has lost the most senior executive it brought on board when it purchased the Lehman assets: since then, the bank’s share price has fallen some 75 per cent and is now close to its lowest level since 1974.
But analysts say that the downsizing of Nomura’s investment bank is unlikely to see a new challenger expand to fill the space. Its rivals are also shrinking: RBS is set to announce that it will shrink its staff by up to 4,000 in its global banking & markets (GBM) division – its investment bank – which comes on top of 2,000 already announced last year.
And Morgan Stanley has begun implementing the 1,600 of cuts it announced last month. Sources told City A.M. that among the losses in its London office are several senior bankers with records in generating profits, suggesting that the cuts are fuelled by strategic changes as much as performance.
Among them are Anthony Stewart, head of index trading; Richard Evans, head of the delta one equities desk; and Patrick Lynch, the bank’s head of European credit sales and trading.