Nomura Holdings Eyes 30% Revenue Growth in Trading Over Next 3 Years
Nomura Holdings is set to see a significant increase in trading revenue, potentially reaching up to 30% growth in the next three years. The Japanese bank is focusing on expanding its business serving hedge funds, with plans to surpass its initial 20% growth target. The recent surge in revenue from government bonds and equities, along with new expansion strategies, is propelling Nomura towards its ambitious goal.
Rig Karkhanis, Head of Global Markets at Nomura, highlighted the positive developments in the rates business in Europe and the successful investments in equities. The markets unit's revenue has already seen a 15-20% increase this year compared to last year, making it Nomura's largest revenue-generating division.
Following a significant loss from the Archegos fund collapse in 2021, Nomura has refocused on strengthening its risk controls and technology infrastructure. The bank is now looking to expand its prime brokerage services to cater to hedge funds' financing and trade execution needs.
Prime broking, a lucrative but risky business, has been growing steadily in recent years, with banks like Barclays expanding their offerings. Nomura aims to leverage its existing prime businesses in the US and Asia to attract clients and diversify its revenue streams.
Overall, Nomura's strategic focus on trading and prime brokerage services, coupled with its risk management improvements, positions the bank for substantial growth in the coming years. Investors and clients alike can benefit from Nomura's enhanced capabilities and expanded offerings in the financial markets.