BLOOMBERG
Nomura Holdings Inc. suspended a group of senior executives at its investment bank and replaced a top risk official as it reels from billions of dollars of losses on trades with Archegos Capital Management, Bloomberg reported.
Dougal Brech, global head of the prime-brokerage division that caters to hedge funds, has been suspended along with U.S. prime head Joshua Kurek and co-head of global equities Michael Caperonis, people familiar with the matter said to Bloomberg. Douglas Lyons, global head of credit risk, will stay at the Tokyo-based firm but will be replaced by Patrick McGarry, said the people, who requested anonymity as the details aren’t public.
Nomura is among several global banks shaken by transactions with Archegos, an obscure investment firm set up to manage the fortune of trader Bill Hwang. Japan’s biggest brokerage, which lost some $2.9 billion on its dealings with Archegos, has hired external lawyers to conduct a “comprehensive, impartial review,” according to a presentation to investors Tuesday, and appointed a new head of its U.S. subsidiary earlier this week.
Shares of Nomura rose as much as 2.2% on Wednesday morning in Tokyo and were trading up 1% at 9:30 a.m., taking declines to about 18% since the Archegos debacle emerged.
Quarterly Loss
Nomura’s losses from trades with Archegos exceed the $2 billion it flagged a month ago and have complicated its global ambitions. The bank logged a fourth-quarter net loss of 155.4 billion yen ($1.4 billion), its biggest since the global financial crisis.
In a surprise appearance at Tuesday’s earnings briefing, Chief Executive Officer Kentaro Okuda signaled he will persist with plans to build a presence in the U.S. even after the Archegos meltdown, saying there is no major change in the firm’s overall strategy for its wholesale business.
Some analysts agree that the Japanese firm might be able to embark on a path to recovery after its earnings had handled most of the negatives such as the Archegos losses and impairments.
The Financial Times reported Brech’s suspension earlier. Aoife Reynolds, a spokeswoman for Nomura in London, declined to comment. Brech also declined to comment. Caperonis, Kurek and Lyons did not respond to requests for comment via LinkedIn.