Nomura's Shanghai Office Shows Progress | Generated by AI
Nomura Holdings’ Shanghai office has been facing significant challenges, though there are some recent signs of improvement. Here’s the current situation:
Current Status - Mixed Performance
Net loss at Shanghai-based Nomura Orient International Securities narrowed 30% to 128.7 million yuan ($18 million) in the year ending Dec. 31, a statement showed this week, marking the second straight year of improvement. While still posting losses, this represents progress from the deeper losses of previous years.
Historical Performance - Years of Losses
The Shanghai operation has struggled since its launch. Nomura Orient International Securities, Nomura Holdings’ Shanghai-based joint venture brokerage, lost 184.5 million yuan ($26 million) in 2023, marking the fourth straight year of losses since its launch. The losses have been substantial over the years:
- 2024: 128.7 million yuan ($18 million) - improved
- 2023: 184.5 million yuan ($26 million)
- 2022: 225 million yuan ($30.75 million)
- 2021: 84 million yuan
Strategic Overhaul
The firm’s Shanghai-based joint venture is reassessing its strategy, according to people familiar with the matter. This strategic review comes as Nomura Holdings Inc. is overhauling its China business after losses there snowballed, reflecting setbacks to plans by Japan’s biggest brokerage to expand on the mainland.
Recent Developments
Leadership Changes: The former head of Nomura Holdings Inc.’s Chinese securities business has left the company, as Japan’s biggest brokerage tries to stem years of losses from its operations in the mainland.
Scaling Back Operations: Nomura Holdings Inc. is closing one of its four branches in China, as the Japanese securities firm scales back its wealth management business in the mainland after years of losses. Nomura Holdings has reportedly decided to close one of its four branches in China, shutting its Zhejiang province office.
Joint Venture Structure
The Shanghai office operates as Nomura Orient International Securities, which is Nomura Holdings, Inc. contributed 1.02 billion yuan, accounting for 51%; Orient International (Holding) Co., Ltd. contributed 498 million yuan, accounting for 24.9%; Shanghai Huangpu Investment Holding (Group) Co., Ltd contributed 482 million yuan, accounting for 24.1%.
Outlook
Despite the challenges, Leveraging the global resources of Nomura Group, we are dedicated to the long-term development of China’s capital markets. We will continue to invest and gradually evolve into a fully licensed securities company, providing cutting-edge, comprehensive financial service solutions to our Chinese clients.
The Shanghai office remains part of Nomura’s long-term China strategy, though the company is clearly reassessing its approach and scaling back certain operations while working toward profitability.