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Nomura exits US residential mortgage-backed securities business

Nomura Holdings of Japan has announced its exit from the US residential mortgage-backed securities market.

Nomura’s exit from the residential mortgage-backed securities (RMBS) business is part of an ongoing reorganization of the group’s US operations. As part of the reorganization, Nomura expects to cut regional headcount from about 1,300 to about 900, and to reduce annual expenses by approximately $213 million.

The restructuring will result in a total charge of about $128 million. Of this, approximately $85 million will be booked in the second quarter, on top of losses from the RMBS business of around $621 million. As a result, Nomura expects to post a consolidated pre-tax loss in the second quarter of around $340 million to $511 million.

Nobuyuki Koga, president and CEO of Nomura, said: Nomura has faced challenges in the US residential mortgage-backed securities market which have led to these disappointing results.

However, we have moved decisively to deal with the issue and have avoided further and protracted losses by taking firm and immediate action. This draws a line under the residential mortgage-backed securities problem. We remain strongly committed to the US and to the development and growth of profitable operations that reflect our core competencies.