Société Générale, the French bank, has become the third securities firm in as many months to sharply cut back its Japanese equities operations.
SocGen is sharply cutting back its domestic Japanese equities business, and laying off 46 staff in Tokyo. The cuts come across the board in research, sales and trading, and will affect 40% of the total equities staff at SocGen in Japan.
The bank said it was "realigning the resources of its Japanese equities activity". Under the restructuring, SocGen will retain its convertible bonds and equity derivatives business. It will also retain an execution capability in program trading and some sales trading, and will keep its technology and economics research teams.
The cuts come just weeks after ABN Amro fired 120 staff in Japanese equities after it pulled out of the business. In September Dresdner Kleinwort Wasserstein also sharply cut back its Japanese equities business.
The moves reflect the fierce competition in the Japanese markets in the wake of recent deregulation. In addition, the Japanese market has continued to fall for 11 years. This year, the Japanese market is down over 25%.
At SocGen, the decision to cut back in Japanese equities reflects a wider restructuring of the firm's non-core equities business. In June the firm fired 70 staff, mainly in emerging markets equities. It is currently in the process of integrating its Paris and London activities to focus on European equities.
This is reflected across its entire investment banking business, where SocGen is cutting back in non-core operations. This year it cut the number of sector teams in its mergers and acquisitions division, and last year the firm closed its emerging markets debt business.