From Reuters:
Nomura to exit US mortgage business, post big loss
Nomura Holdings, Japan’s largest brokerage, said it would pull out of the U.S. residential mortgage-backed securities market and cut its U.S. work force by about 30 percent, pushing it to a big quarterly loss.
Nomura is the latest global investment bank forced to swallow bigger losses stemming from exposure to U.S. credit markets thrown into turmoil as “subprime” borrowers defaulted on housing loans.
Nomura said it would post a group pretax loss of about 40-60 billion yen ($340-$511 million) for the July-September second quarter, hit by losses on mortgage-backed securities and charges to cut its U.S. workforce to about 900 from 1,300 as of March.
“This should all but clear up our problems in the United States, and we believe we can build a structure that will allow us to achieve a speedy recovery from the second half,” Nomura Chief Financial Officer Masafumi Nakada told a news conference.
Nomura said earlier this year it may pull out of the mortgage business as part of a reorganisation of its U.S unit, which lost 74 billion yen on a pretax basis in the two quarters to June due to losses on residential mortgage-backed securities (RMBS).
In the second quarter through September, Nomura cut its U.S. RMBS exposure to about 48 billion yen from 266 billion yen. That has since shrunk to 14 billion yen, only 100 million yen of which is subprime-related, Nomura said.