Nomura Stumbles in New Global Push By ALISON

Nomura Stumbles in New Global Push By ALISON TUDOR Power Point Presentation By Team Deer • • Luke M Taylor K Anthony M Ibrahim A

Overview • Nomura Holdings Inc. acquired Lehman's international operations last September. Problems 1 - Cultural Differences 2 - Business Differences 3 - Financial Problems TENSION OVER 1 -HOW QUICKLY DECISIONS ARE MADE 2 - TREATMENT OF WOMEN IN THE WORKPLACE. 3 -EXECUTIVE COMPENSATION

Nomura Disclosed Wednesday • Nomura closed with a profit for the first time in six quarters. • They ended the first quarter on June 30 th with a profit of 11. 42 billion yen ($121 million). • This was a surprise to all of the analyst that figured they would loss more money again this past quarter. • With the profit of the past quarter it allowed Nomura to jump revenue 41% up to 363. 60 billion yen.

Nomura going International • "If we were a 100% domestic house, we would make a very good meal for either a Japanese megabank or, more importantly, anybody who counts in the international arena, " says Takumi Shibata. • After acquiring Lehman’s operations from Europe and Asia, Nomura attempted to go into the U. S. during the 1990’s, with very little success. • Nomura took a hit of $600 million dollars only a few years into there operations in the U. S. • As of late though U. S. officials have been looking to go for non- U. S. firms says a Nomura official.

Nomura gaining respect • Earlier last week, Nomura Securities International Inc. became a primary dealer for treasuries by the Federal Reserve Bank of New York. • After recruiting for U. S. fixed-income and investment-banking, Nomura now has a head count of 855 compared to the 650 it had in September.

Merging Troubles • In finance people are the main assets to the business. • Nomura tried to mix 8, 150 American workers into a Japanese company. • Many key Lehman workers such as Alexis de Rosnay left immediately after the merger. He was the co-head for Lehman’s European investment banking. • Lehman workers feared Nomura would have trouble making deals in the United States because they had only bought Lehman’s European and Asian divisions.

Controversy Within • Lehman workers were guaranteed temporary top of the market bonuses. This was an effort to keep workers from leaving. • Nomura workers were upset by this benefit given to merging Lehman workers but not to them. They had been loyal workers with more years in the company. • Lehman division heads could make tens of millions of dollars a year compared to $250, 000 a year that Nomura heads might make.

Financial Problems • Staff compensation doubled at Nomura to 161. 8 billion yen (December 31) compared to their previous quarter. • The increased compensation mixed with the failing of the Japanese economy lead to financial problem at Nomura. • Nomura had to start laying off employees to compensate for a decrease in business opportunities.

Training Session • Males and Females were trained separately at Nomura • Women: some of whom were Harvard graduates – were taught how to wear their hair. – serve tea and choose their wardrobes according to the season

Business Etiquette • New strict business etiquette for Lehman employees both male and female. • Women – No Highlighted hair. – Sleeves no shorter than mid bicep. – Avoid bright clothing. • Nomura representatives believe clients and fellow workers feel more comfortable with a strict dress code.

Integration throughout Nomura • Nomura was trying to mix the culture of the Nomura side and Lehman side. • Outside of Japan, the companies were mixed between a variety of nationalities. • The problem was that the company was centered too much around Tokyo. • They moved two people: a) Head of Global Investment Banking, Hiromi Yamaji to London b) Head of Global Equities, Naoki Matsuba to New York

• And also appointed Tarun Jotwani to Head of Fixed Income in Japan. • -This resulted with Nomura setting up a team that traveled all over to help with the integration process. • -The Lehman side complained about the Nomura side bankers because a) They would report to other executives after client meetings. b) The process with them was slower and more difficult c) Disagreements on how to categorize the clients

The Good and Bad of Nomura • It aims to cut costs by 10% in the current year. • Laid off 50 bankers in Asia. • In Europe, 100 Lehman employees left the company. • The financial health has improved because a) A business boost in Asia. b) Increasing contributions from Europe.

• Prior to the collapse, Lehman was atop the Stock Exchange in London. • In December, they were 82 nd • On June 30 th, they were 3 rd place in terms of value of shares traded. • Former employees get a guaranteed bonus and a select few get another but after that their bonuses will fall dramatically.

Sources – Wall Street Journal • Nomura Stumbles in New Global Push