Nomura Holdings, Inc. -- Japan's largest investment bank -- said today it will exit the US residential mortgage-backed securities business amid "disappointing results." The company said it reduced its exposure to the RMBS market by nearly $2 billion (48.0 billion yen) during the second quarter, and that only $119 million (14.0 billion yen) remains of the company's residential mortgage securities holdings. The investment bank will cut 1,300 jobs in the US -- more than half of its workforce -- as it reorganizes operations in the States to reduce roughly $213 million in costs.
"Nomura has faced challenges in the US residential mortgage-backed securities market which have led to these disappointing results," said Nobuyuki Koga, President and CEO. "However, we have moved decisively to deal with the issue and have avoided further and protracted losses by taking firm and immediate action. This draws a line under the residential mortgage-backed securities problem. "We remain strongly committed to the US and to the development and growth of profitable operations that reflect our core competencies," said Mr. Koga.
Funny how RMBS quickly fell outside of the company's 'core competencies' once the losses started rolling in. I think Koga meant to say that Nomura will remain in the US securities market wherever it can make money -- and that it can no longer do so in the RMBS market.