What happened next?

Sadeq Sayeed talks about the impact of Nomura's acquisition of Lehman Brothers in EMEA and Asia, one year on
Investment banking
Commercial awareness

It has been a year since the Japanese investment bank Nomura took over the franchises of Lehman Brothers in Asia, Europe and the Middle East. How successful has the integration been?

The integration has been very successful. We are one of the few players to have been able to strategically improve our global position during the last twelve months and this is something we are now celebrating.

We faced the same challenges that go with any merger, combined with one of the most difficult economic and financial environments that the world has seen in a very long time. We had to think carefully and manage our aggressive aspirations with the need to demonstrate that this deal was good for clients, employees and shareholders.

By being able to make the right decisions about which parts of Lehman Brothers we wanted to acquire in Europe and Asia, successfully integrating them and getting everyone back into the business of creating value for our clients, we have surpassed even our own expectations of what could be achieved in such a short space of time. We have generated a profit in the first and second quarters of our fiscal year (which began on April 1) and, for the first time in the company's history, the majority of Nomura's global revenues now come from outside Japan.

As a result, clients have maintained their confidence in Nomura, we are attracting top talent from across financial services in every market and product, and the entire industry is taking notice.

How compatible were the Nomura and Lehman Brothers cultures when you bought them together?

This was a case of two strong investment banks joining forces, and investment bankers are success-oriented people, no matter where you look across the globe. The assumption that somehow a successful banker in Japan has fundamentally different values or motivations than their peers in London, Hong Kong or New York is naive.

Our 4,500 employees in Europe are from 77 nations. Nomura is a multi-cultural bank, and we're proud of that. The leadership of this organisation has become one of the most culturally diverse in the industry, and this will continue to be a competitive advantage in a global economy.

How did Nomura generate such positive revenue growth?

Our income growth has resulted from the expansion of our business following the acquisition, and of course the decline in spreads in the credit markets has also been beneficial to the equity markets. We have leveraged this momentum across our investment banking businesses to take market share from traditional names, but in an efficient and cost-effective way.

Moreover, our asset management and branch network business in Japan continued to perform well.

Where do you perceive yourself in a ranking of investment banks?

As you know, everyone has league tables that show themselves at the top. We have historically been the leaders in many markets across Asia and have taken the top spot in new areas like European equities.

I believe we have a good chance of establishing ourselves consistently in the group of market leaders in the products and regions we choose to be in. We correctly anticipated that the number of large-scale competitors would decrease during the crisis. In addition, we are benefiting from the fact that we didn't need any government aid. We are fully independent in our scope for action. Given the scrutiny our industry is under at the moment this has become even more important to our clients.

Given the continued uncertainty in the market and your ongoing challenges, you're probably not likely to be thinking of additional acquisitions right now?

I never say never as you don't know what opportunities are round the corner. If we feel that we can't make progress in a particular region on our own steam, in principle we should certainly consider an acquisition. But that's no issue at this point in time.

Where are your white spots on the map?

We had good reasons not to take over the US business from Lehman Brothers. This also means, however, that we can't do everything in the United States. We don't have to go to Utah to consult a local company there interested in purchasing some other company in Idaho. But we do need to get into business with the large-scale US conglomerates and support our other global clients looking for certain types of opportunities in the Americas.

Do you have more ambitious plans in Europe?

Indeed. To us, Europe lies at the heart of our international investment banking activities. In my opinion, Europe has a dynamic, multi-cultural, open economy that welcomes strangers to its shores. Europe's finance system is highly innovative, no matter whether you're looking at derivatives or processing securities transactions. We appreciate the importance of financial technology and are well positioned already to continue to take the lead in many countries.

The challenge in the Americas is that the US capital market is largely national in outlook and is controlled by an oligopoly of domestic market players. In reality, it is a very closed market in which only a few foreigners are successful. This requires a very strategic approach to make sure we build a profitable and sustainable franchise in the Americas.

Many students are worried about the prospects of career opportunities in the investment banking industry. How would you describe the opportunities at Nomura?

This is a challenging time for the global economy but the financial services industry continues to be fundamental to stimulating and driving economic activity around the world.

For talented graduates this is still one of the most exciting fields that they could consider - where they will learn more and take on more responsibility faster than other options.

Nomura today is buzzing with entrepreneurial energy and offers a host of growth opportunities to bright, talented individuals. The next important step in building our business is to have the leadership pipeline that reflects the talent, diversity and ambitions of Nomura globally. So many professionals, including myself, are active in the recruiting process to share with students more details about our experience in this business. From a personal perspective, what makes me most proud to be a part of Nomura is how we have transformed as a company in such a short period of time and are now becoming a major global player.

Next year, you will be moving into new premises in the City of London. Given how much space appears to be available in Canary Wharf, what is the rationale for the move?

One Angel Lane is a beautiful state-of-the-art building in one of the largest open riverside spaces in the City of London. We wanted to move to a place where we would be closer to our clients, where our staff would feel inspired and that symbolised the spirit and aspirations of the company. It is within walking distance of Nomura's historic building near St Paul's, bringing all of our staff closer together. Between both buildings we will have the space to grow in the future.

For our staff, moving into a new space is very meaningful. It will mark the end of difficult year of change and transformation and focus everyone on the future.

So what does the future hold for Nomura?

Our hard work and commitment has paid off and while there is more work to do, our achievements should give us confidence for the future. I see our future as one where we continue to grow and capitalise on our strengths, where our people always feel proud to say they work for Nomura and where our clients recommend us at every opportunity.

Nomura has 84 years of proud tradition, has witnessed one year of global transformation and has a future limited only by our imaginations. History will be favourable to us - because we are writing it. We are always looking for new talent to join us on this journey.

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