Nomura posts 492.36 bil. yen net loss for April-Dec. period

TOKYO, Jan. 27 Kyodo - Japan's largest brokerage house Nomura Holdings Inc. said Tuesday it fell into
the red with a group net loss of 492.36 billion yen for the first nine months
of fiscal 2008 ending in March, with its balance sheet crippled by the
deepening global financial turmoil and the costs of taking over failed U.S.
investment bank Lehman Brothers Holdings Inc.
The huge loss compares with a group net profit of 86.01 billion yen logged in
the same period a year earlier, raising the likelihood Nomura will record red
ink in fiscal 2008 for the second consecutive fiscal year for the first time,
with possibly its largest loss ever.
To clarify management responsibilities for the dismal performance, Nomura's
chief financial officer Masafumi Nakada said the monthly pay of 20 executive
and senior officials will be cut by 20-30 percent for fiscal 2009 and they will
also forgo their annual bonus for the current business year.
Nomura has been grappling with depressed stock and bond trading as well as
growing evaluation losses on securities holdings following Lehman's collapse in
September.
''We ended up being hit with a large-scale loss due to the highly unprecedented
financial turmoil and the subsequent impact on the real economy,'' Nakada said
at a press briefing in Tokyo.
For the nine-month period, Nomura said it logged a pretax loss of 553.15
billion yen compared with a year-earlier profit of 133.74 billion on revenue of
518.32 billion yen, down 64.7 percent.
Nomura also said it incurred a group net loss of 342.89 billion yen for the
October-December period, the worst quarterly performance since it adopted U.S.
accounting standards from the April-June period of 2001.
Of about $2 billion in costs to take over Lehman's employees in Europe, the
Middle East and the Asia-Pacific region including Japan, Nomura logged about
one-third of the costs during the third quarter with the remaining costs to be
shouldered in the future.
In addition to Lehman costs, Nomura's balance sheet was also eroded by
additional losses linked to exposure to cash-strapped Iceland and to a $50
billion pyramid scheme allegedly crafted by U.S. investment manager Bernard
Madoff.
Nomura reported 243.4 billion yen in special losses while chalking up 147
billion yen in trading losses at its global marketing division.
Nomura said it will cut total costs by 10 percent in fiscal 2009 by focusing on
core businesses while scrapping unprofitable operations, leaving open the
possibility of further layoffs in addition to the 1,000 job cuts already
announced in London.
''I think we will be the first to emerge out of this negative tide sweeping
across the financial markets,'' through aggressive cost-cutting measures,
Nakada said.
While Nomura did not provide a full-year outlook, it admitted the possibility
of red-ink figures for the current business year and revised downward its
dividend forecast for the full fiscal 2008.
The company said it will not pay any dividend for the fourth quarter. The
dividend for the current fiscal year will thus be 25.5 yen per share, compared
with an earlier projection of 34.0 yen per share.
Following the earnings results, Standard & Poor's Ratings Services downgraded
its credit rating on Nomura Holdings one notch from ''A-minus'' to
''BBB-plus,'' saying Lehman-related costs continued to pose ''additional
risks'' to Nomura's financial base.
Nomura also said it may merge its online unit Joinvest Securities Co. with
Nomura Securities Co. to strengthen its online services for individual clients.
==Kyodo