Archegos drags Nomura to a worst in decade loss

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The Japanese financial and brokerage conglomerate Nomura announced it had suffered a 1.4bn dollars loss in the first quarter of this year due to pandemic slowdown which further worsened the $2.3bn hit caused by the collapse of US investment fund Archegos, Reuters reported. The loss unveiled by Nomura is the worst since the 2008 acute financial crisis. Nomura noted that it expects to book a further $570 million in charges this year, related to Archegos bankruptcy.

"We are not planning to make major changes to our US and global business strategy," Nomura CEO Kentaro Okuda told a media briefing. Before Archegos failed to meet margin calls on heavily leveraged stock bets last month, Nomura had been on track for record annual profit, bolstered by a buoyant US trading business. That was set to have been a hard-fought victory in its decade-long, stop-start efforts to successfully expand outside Japan.

Instead, it posted net income that was down by 29% from the previous year. Nomura's Archegos loss, which is slightly larger than a previously flagged $2 billion, is the second worst after Credit Suisse. The Swiss bank booked a $4.8 billion Archegos hit in January-March and expects further losses. Morgan Stanley lost nearly $1 billion, while Goldman Sachs and Deutsche Bank exited without losses.

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