Bulging brackets

31 March 2021 By Jennifer Hughes Follow @JennHughes13

The Japanese lender’s investment bank makes more money in the United States than elsewhere, thanks in part to being big in equities. A potential $2 bln hit from the troubled fund has the unit sputtering. Unclogging the mess means proving the loss is an anomaly. That’ll be hard.

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Nomura on March 29 warned it may have to take a potential significant loss from what the Japanese bank described as a “U.S. client”. As of the end of trading on March 26, Nomura had a “claim against the client” of approximately $2 billion.

The disclosures came after sharp falls in the stock prices of numerous U.S. and Chinese companies that were linked to forced sales by Archegos Capital Management, a family office set up by Sun Kook “Bill” Hwang, a former hedge fund manager.

Others involved with Archegos included Goldman Sachs, Morgan Stanley and Credit Suisse. The first two have not warned of material losses but the Swiss bank on March 29 said it faced a financial hit – which it did not quantify – relating to a U.S.-based hedge fund.

On March 30, the brokerage arm of Japan's Mitsubishi UFJ Financial Group, one of Nomura’s domestic rivals, flagged a potential loss of $300 million at its European subsidiary, related to an unnamed U.S. client.

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