Nomura is weighing a return to offering cash prime-brokerage services in the US and Europe.

Nomura is weighing a return to offering cash prime-brokerage services in the US and Europe.

Japan's largest investment bank, Nomura Holdings, is considering a return to offering cash prime-brokerage services in the US and Europe. The move comes after its recent acquisition of Macquarie's US and European public asset management business, which could provide a strategic foothold for expanding its services in these regions [1].

Nomura's latest acquisition, valued at $1.8 billion, includes about $180 billion in client assets and boosts its Investment Management Division's assets under management to around $770 billion, with over 35% managed for clients outside Japan [1]. The acquisition also gives Nomura a major US hub in Philadelphia, strengthening its retail and institutional distribution, particularly within top US platforms and the insurance sector [1].

The potential reintroduction of cash prime-brokerage services would be a significant addition to Nomura's existing services. The bank has a history of global expansion, including the acquisition of Lehman Brothers' assets in 2008 and investments in Greentech Capital and American Century Investments [1]. However, it has also faced setbacks, such as struggling after acquiring Lehman's Asia and Europe units and taking a $3 billion hit from the Archegos collapse in 2021 [1].

Nomura's recent earnings have shown improvement, with profits more than doubling to $1.9 billion in the nine months to December, and overseas units remaining profitable throughout the fiscal year [1]. This positive financial performance may indicate that the bank is well-positioned to consider expanding its services further.

The decision to re-enter the cash prime-brokerage market in the US and Europe would be a strategic move for Nomura, potentially attracting more clients and increasing its market share in these regions. However, it is essential to consider the potential risks and challenges associated with such a move, including market volatility and regulatory changes.

References:
[1] https://www.outlookbusiness.com/corporate/nomura-buys-macquaries-us-european-asset-management-unit-for-18-bn-in-biggest-ever-deal