(2 of 5)
Like all other securities firms, Nomura has felt the sting of last October's Wall Street crash. For the six months ended last March, the company's profits nosedived to $713 million, a 23% decline from the same period a year earlier. But that was more than 300% higher than the 1985 figure, and Nomura continues to benefit from the unprecedented boom in the Tokyo stock market (see box).
Using its close ties to Japanese investors, Nomura serves as a central conduit for the trillions of yen pouring out of Japan in search of bigger, better returns. Last year, when Japan had a trade surplus of $96 billion, its net purchases of foreign securities amounted to $88 billion, up from $4 billion in 1980. The largest portion of that outflow used to go into U.S. Treasury securities, but increasingly the Japanese are buying foreign stocks and bonds. They are also acquiring overseas companies and real estate. And no matter what type of play a Japanese investor wants to make, Nomura stands ready to help.
Behind the firm's drive to become the world's unrivaled financial heavyweight is Yoshihisa Tabuchi, 56, a forceful and intensely competitive 32- year Nomura veteran, who became its president in 1985. A former salesman and retail-branch manager, Tabuchi believes Nomura's aggressive style of selling and dealmaking can work in any market, no matter what the language or currency. Nomura, after all, has a big advantage over foreign rivals -- and Tabuchi knows it. Says he: "Japan has simply become the world's source of capital."
Nomura would not be so ambitious overseas were it not for its enormous strength at home. It offers a full roster of investment services, including underwriting, money management and research. Nomura handles nearly 17% of all stock trades in Japan; its nearest rival, Daiwa Securities, has a 12% share of the market. Nomura claims an equally commanding slice of the bond market, 19%, vs. 12% for Daiwa. Nomura and Daiwa, along with Nikko Securities and Yamaichi Securities, are known in Japan as the Big Four. Says a Nomura director, with a mix of arrogance and pride: "It's not really the Big Four. It's Nomura and the Little Three."
A staff of 2,700 salesmen operates out of 131 branch offices throughout Japan, handling 4.8 million individual and 200,000 corporate accounts. In addition, the company has a 2,600-strong force of part-time saleswomen, mostly middle-aged, who troop from door to door, hawking stocks and bonds. This corps was established 30 years ago, when the company sought to spur personal investment by distributing savings chests to Japanese households. The local saleswoman held the keys to savers' chests. Each month she came by to empty the chest and place the money in the customer's Nomura account. The company gave out more than 1 million chests before the gimmick was retired in 1962.
This year the firm introduced a contemporary equivalent: a computerized home investment service. Nomura customers who connect their home computer to their telephone can press a few keys and bring to the screen the latest listings of stock and bond prices and other information. With a few more taps, customers can signal their investment choices.