Japanese Company Closes U.S. Mortgage Securities Business
TOKYO, Oct. 15 (AP) — Nomura Holdings, Japan’s largest securities firm by revenue, said Monday that it would shut its American residential mortgage-backed securities business, the latest casualty of the subprime mortgage crisis.
Nomura said in a statement that it would book a 73 billion yen ($621 million) loss in its residential mortgage-backed securities business, and that it expected a group pretax loss of 40 billion to 60 billion yen ($340 million to $510 million) for the July-September quarter.
The company also said it would cut more than 400 jobs in the United States, about 30 percent of its work force there, by March 2008, mostly in its broker-dealer operations and back offices.
The Japanese group has already written off about $620 million related to its American subprime mortgage-related business.
Nomura’s woes follow a string of losses at major American and European banks from exposure to risky loans made to individuals with poor credit histories.
Mortgage-backed securities are created by bundling together these home loans and repackaging them as securities that can be bought and sold.
Standard & Poor’s said its rating on the Nomura group would not be affected by the loss, citing its generally solid performance in other segments like domestic operations.
