SMBC Nikko Securities Inc. extended its losses to a fourth straight quarter as the brokerage arm of Japan’s second-largest banking group pointed to rising costs and struggles to recover from a trading scandal.
(Bloomberg) — SMBC Nikko Securities Inc. extended its losses to a fourth straight quarter as the brokerage arm of Japan’s second-largest banking group pointed to rising costs and struggles to recover from a trading scandal.
The securities arm of Japan’s second biggest banking group Sumitomo Mitsui Financial Group Inc. posted 15.4 billion yen ($114 million) in net losses for its fiscal fourth quarter ended March 31, according to a statement Friday. That set a new record, after a 14.9 billion yen loss in the previous three months.
SMBC Nikko has been seeking to restore profit after the scandal involving stock price rigging caused clients to take some of their business elsewhere, adding to the pain from a global downturn in investment banking. The firm and a former executive were found guilty of market manipulation earlier this year, leading to a fine and forfeiture of earnings for SMBC Nikko.
The company saw a 4 billion yen hit to revenue in the quarter from the fallout, Shuji Yoshioka, head of planning, finance and business strategy, said at a briefing.
The brokerage has sold less than 1 billion yen in risky bonds known as Additional Tier 1 notes issued by Credit Suisse Group AG, Yoshioka said. Switzerland’s rescue last month of Credit Suisse wiped out the risky debt issued by the bank, handing Japanese investors about 140 billion yen ($1 billion) in losses.
Read more: SMFG Ramps Up Wall Street Push With $3.4 Billion Jefferies Bet
Elsewhere, the brokerage’s parent has been seeking closer ties with its US investment banking partner, saying on Thursday it plans to raise its stake in Jefferies Financial Group Inc..
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