Mar 27, 2023
Nomura Cautions on Credit Suisse Hiring as Rivals Grab Talent
(Bloomberg) -- Nomura Holdings Inc., which snapped up thousands of employees when Lehman Brothers Holdings Inc. went under, is cautious about pouncing on the similar opportunity thrown up by turmoil at Credit Suisse Group AG.
Any additions will be on a case-by-case basis and Nomura has no intention to buy any of Credit Suisse’s assets, according to Christopher Willcox, head of Nomura’s wholesale business. “We’re not going to suddenly hire, you know, 30 people because they happen to become available out of a one-off event,” Willcox said in an interview in Tokyo. “Our plans have not changed as a result of Credit Suisse.”
While Japan’s biggest brokerage could end up getting some Credit Suisse bankers as it continues to invest in its businesses, it isn’t “systematically” trying to target the Swiss bank’s employees, Willcox said, adding that wealth management and equity derivatives are among the areas Nomura is focusing on.
Nomura is sounding a note of caution as some of its Wall Street rivals hunt for talent from Credit Suisse after a government-brokered takeover by UBS Group AG. US and European banks are undoing de facto hiring freezes to cherry-pick key personnel at a discount, while some Credit Suisse executives themselves have been seeking potential suitors for its investment banking operations, people with knowledge of the matter have said.
“Sometimes events like this look like they present you a huge opportunity, but there’s a risk when you do that,” Willcox said. “You then end up doing something quickly because it’s as a consequence of reacting to events.”
The drama surrounding Credit Suisse brings back memories of the global financial crisis in 2008-2009, when Nomura and Barclays Plc snapped up operations of failed Lehman Brothers. Nomura took over roughly 8,000 Lehman employees at that time with an ambition to become a world-class investment bank. But the move swelled expenses, leading to rounds of cost overhauls and a writedown.
Tokyo-based Nomura’s present approach is “completely different,” Willcox said. “Our agenda is organically building our capabilities.”
Willcox joined Nomura in 2021 amid one of the most tumultuous periods in its history, marked by losses from transactions with Archegos Capital Management. After decades rising through the ranks at Wall Street firms, he is now in charge of strengthening Nomura’s wholesale business, which generates roughly half of the firm’s overall revenue and includes trading, investment banking and international wealth management.
“In some ways in these situations, there’s a sort of tendency for people to look to, you know, shark-like behavior in terms of plundering the corpse of some of a firm where something’s gone wrong,” Willcox said. “I think that’s not the right way to think about this. I think about this as a very sad event.”
Growing Wealth Business
The wealth management business is an area where Nomura’s growing ambitions coincide with Credit Suisse’s traditional stronghold. The Japanese brokerage sees potential to earn an additional $1 billion or more in revenue by pushing more deeply into managing money for the rich, in addition to equities and private markets.
Nomura aims to ramp up assets under its international wealth management business to as much as $35 billion by March 2025 and has hired more than 100 front-office staff in recent years for these services in the Middle East and Asia, excluding Japan and China, based on company presentations in May last year. The firm has grown assets under management in this area to $15 billion currently, according to Willcox.
Nomura may be able to accelerate some of its hiring from bankers who could leave Credit Suisse’s “excellent” wealth management franchise, Willcox said.
In Asia, UBS wealth boss Iqbal Khan told Credit Suisse staff he’s working on retention measures including compensation as the bank seeks to prevent an exodus of top talent.
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