Nomura's new ex-accountant London boss should be pleased with his Deutsche Bank staff
John Tierney, Nomura's brand new CEO in Europe, is both an accountant and the bank's former COO for EMEA. This can be an ominous evolution - just ask everyone who worked under ex-COO Paul Compton when he became head of the investment bank at Barclays.
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Tierney's ascension at Nomura comes after the last set of accounts filed for Nomura International in London show the bank making an operating loss of $53m in the year to March 2024, down from a profit of $59m one year previously. Tierney's training may tell him that cuts must occur.
As Tierney casts about for costs to lop, however, one team should be immune: Nomura's new European equities sales and trading business, run by Glen Fairbairn, a former managing director at Deutsche Bank.
Fairbairn was parachuted into Nomura in 2021 and has since built a team comprised of various other Deutsche Bank people. They appear to be thriving there: we understand that the 2024 European equities budget has already been substantially exceeded by circa 50%, compared to a mere 26% year-to-date increase in Nomura's equities revenues globally. And the outperformance of the European equities business this year comes after an equally impressive 2023.
The chart below, taken from Nomura International's accounts, shows comparative gains, by asset class, in its European trading business in the year to March 2024. These gains are not always realized, but indicate a direction of travel. The improvement in cash equities last year is, again, impressive. The deterioration in equity and credit derivatives is not.
Source: Nomura
Nomura didn't confirm this year's impressive European equities figures. It isn't commenting on Tierney's promotion, which came after the bank initially promoted Toru Otsuka into the role, subject to regulatory approval.
Insiders at Nomura tell Tierney is unlikely to make much difference to their day-to-day lives. His predecessor, Jonathan Lewis, seems to have been a regulatory figurehead and was group chief administrative officer (CAO) overseeing technology and operations, chief transformation officer, leading the group's risk management enhancement program and head of Europe. Tierney will presumably adopt all those titles too. Hopefully that won't leave much time for cuts outside the equities team in London.
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