Has Nomura’s London-based fixed income business been granted a reprieve? When it emerged a few weeks ago that Tarun Jotwani was leaving and that Nomura’s markets business was being divided into fixed income and equities, the fears were that the worst was going to happen: that a Japanese-based head of the business would take over and London-based operations would be severely retrenched.
This hasn't come to pass.
Instead, it emerged yesterday that Nomura has appointed Steve Ashley as head of its global fixed income business. For those with short memories, Ashley was hired from RBS back in 2010. Allegedly, he came on a very generous package, put by headhunters at anything from £15-20m.
Ashley’s elevation suggests one of two things, or both.
Firstly, it may imply that Nomura needed to promote him in order to retain him. Ashley started his career with Nomura in Tokyo (prompting hysterical claims that people were leaving the City to escape high taxation) , but moved back to London in July last year to run the macro products business. Having paid so much for Ashley, Nomura may well be loath to let him go. The bank is making thousands of job cuts in Europe and rethinking its commitment to the investment bank. In the circumstances, promoting Ashley may have been the only way of keeping him.
Secondly, it may imply that – despite struggling to make its wholesale bank pay - Nomura hasn’t given up on its fixed income markets business. After all, it isn’t putting fixed income under the control of a trusted Japanese banker, and maybe therefore it won’t be cutting it back to the bone. Maybe Ashley will even do some hiring? Maybe he'll poach more former fixed income colleagues from RBS, where it seems likely that various among them would like to leave?
“Ashley’s been poaching consistently from RBS ever since he arrived at Nomura,” one headhunter tells us. “I imagine he’s got most of the people he wanted already.” Others point out that Nomura’s fixed income business will always struggle because of the bank’s BBB credit rating, which prevents some counterparties from doing business with it.