Nomura: Nomura has finally opened itself up to the investment bankers. Jasjit "Jesse" Bhattal, the most senior of the Lehman Brothers staff it hired from the rubble of the Wall Street bank in September 2008, has been promoted to run the Japanese group's wholesale banking division. Bhattal, who steps up to his new role on April 1, shouldn't waste his new powers.
Bhattal, who helped to orchestrate the Lehman sale, was already on the executive management board - the first non-Japanese to be allowed into Nomura's inner circle. But his new role has added clout. His former boss, Takumi Shibata, will take on a more ambassadorial role as wholesale chairman, giving Bhattal more autonomy. The exact reporting lines aren't clear, say people familiar with the situation, but that should put paid to concerns that Nomura, which has spilled billions since acquiring Lehman, might be waning in its commitment to investment banking.
Giving Bhattal more powers won't sweep away Nomura's Japanese conservatism. But it should position him to address some of the investment bank's bigger obstacles.
High on the list, especially with bonus season coming in April, will be how to remunerate Nomura's bankers more smartly. Regulatory pressure to pay bankers in deferred stock jars with the fact that investors still value Nomura as a Japanese brokerage. There may be scope to think up a more creative way to measure performance.
No less important will be to get Nomura to take more risk, and bag more of the landmark deals its expensive investment banking franchise requires to justify its existence. Nomura’s low return on equity - an annualised 2.6 percent at the last count - shows how far it has to go to match longer-established rivals. Nomura has pulled off some complex transactions, including a big convertible for telecom China Unicom, and a mandate to hedge Abu Dhabi’s stake in Barclays. But bigger deals have proved elusive. Nomura’s bankers can’t entirely blame Japan for that. Seeing Bhattal at the reins should help to revive their fighting spirit.
