Tokyo, Nov 19 - The head of Nomura Holdings Inc, Japan's largest brokerage, said he expects more global acquisitions and consolidation among Japanese regional banks as the financial crisis takes its toll on economies around the world.
"Now Japan is done with the consolidation of major banks. I expect further consolidation will take place among regional banks," Nomura Chief Executive Kenichi Watanabe said on Wednesday.
In an effort to push into local banking, Nomura led a group of investors to buy Ashikaga Bank, a government-controlled lender, for $3 billion in March.
Watanabe also said that the strong yen could encourage companies to seek more cross-border deals, adding to the record number of overseas acquisitions by Japanese firms this year.
"There are many Japanese firms that consider the yen's strength against the euro, pound, and dollar as an opportunity," Watanabe told reporters.
"The firm yen is not necessarily bad for Japanese companies."
Japanese companies have made $68 billion worth of overseas acquisitions so far this year, compared with $19 billion during the same period a year ago, according to data compiled by Thomson Reuters.
In fact, this year's deals already outpace the value of overseas acquisitions for all of 2007, which totalled $25 billion, Thomson Reuters data showed.
The yen has strengthened against the dollar and euro as investors sought the perceived safety of Japan's currency.
LEHMAN
Nomura itself took part in a global acquisition in September, buying Lehman Brothers' operations in the Asia-Pacific region, Europe and the Middle East for $2 billion.
The unified company has the potential to generate about $5 billion in pretax profit if the market recovers, Masafumi Nakada, Nomura's chief financial officer, said last month.
That would be a big boost for Nomura, which last month posted its third consecutive quarterly net loss as financial market turmoil led to big trading losses and discouraged companies from issuing shares or making deals.
Watanabe said the brokerage has no plans to cut its workforce after adding Lehman's staff to its global operations, despite massive job cuts at its global peers, such as Citigroup Inc and Goldman Sachs Group Inc.
"There may be some sections which we may cut or boost, but such moves would be in line with what we have been doing in the past," Watanabe said, adding that Nomura is even increasing its New York operation.
Watanabe also said he thought the global liquidity crisis was over but that the next problem was how to turn the real economy around.
"The next issue depends on how the nations of the world supply financial support," Watanabe said, adding that he was particularly interested in China's next move.
Watanabe told Reuters that he expects the Japanese stock market to turn "positive" next summer as a result of harmonised efforts by global regulators and private sectors to boost the economy.
Shares in Nomura fell 3.5 percent to 749 yen on Wednesday, 0521 GMT, underperforming a 0.7 percent slide in the Nikkei average.