Japan’s Nomura, a global investment bank, has set up a branch in Labuan, seeking to boost its presence in Malaysia and the region.
The offshore branch, Nomura’s first in Asia, opened today and enables it to market risk-management solutions to Malaysian corporates, government-linked entities, banks and insurers, said Samir Bhandari, head of macro sales for Asia ex-Japan in the fixed income division.
He said Nomura aims to become one of the world’s leading investment banks in three to five years and that its growth would be driven mainly by client businesses.
As such, it wants to boost its presence in countries like Malaysia, which is considered to be among Nomura’s most important markets in Southeast Asia, in order to be closer to potential clients.
“The majority of our revenue comes from clients rather than proprietary trading, and that is really what’s driving our global strategy. So it’s imperative for us to become a local player and deliver local solutions … which is why we chose to start with a Labuan branch in Malaysia,” the Singapore-based Bhandari told Business Times in a telephone interview.
The Labuan business, however, allows it to do only non-ringgit products. The bank plans to offer interest rate, foreign exchange, commodity and credit products to clients, as well solutions that are a combination of these.
Bhandari said Nomura’s niche lies in its structured product capabilities. “That’s our unique selling point, it’s probably better than (our rivals’),” he claimed.
Nomura may eventually be interested in setting up a banking subsidiary in Malaysia, Bhandari said. This would enable it to do ringgit-based products, thus widening its spectrum of offerings to clients.
“We’re currently discussing strategy internally on what markets in Asia we want to focus on over the next 12 to 24 months to best service the needs of our clients,” he remarked.
Nomura, which first gained a presence in Malaysia 36 years ago, already has corporate advisory and securities licences here.
It has historically derived most of its revenues from within Japan, but this changed after it bought the Asian and European operations of its bankrupted rival, Lehman Brothers, in September 2008. Now, around half its revenue comes from outside Japan, Bhandari said.
Nomura was the top-earning investment bank in Asia Pacific last year.