Nomura shakes it up and brings back Jesse Bhattal

Nomura appoints Jesse Bhattal as president and COO of its global wholesale business, and brings his former Lehman colleague Philip Lynch back to the region as CEO for Asia ex-Japan.
Jesse Bhattal
Jesse Bhattal

Jasjit "Jesse" Bhattal has been appointed president and chief operating officer of Nomura's global wholesale business, making him the first foreigner to head the Tokyo-based bank's non-retail operations in Japan and abroad, and the first non-Japanese to join Nomura's executive management board.

The heads of the wholesale businesses and the regional CEOs in Asia ex-Japan, Europe, the Middle East and Africa (EMEA), and the Americas will report to Bhattal.

Bhattal will in turn report to Nomura's deputy president and COO, Takumi Shibata, who will take on the role as chairman and CEO of the wholesale division in addition to his current responsibilities. All changes are effective April 1, 2010.

"Jesse's unrivalled experience and track record in this industry makes him the best possible choice to take our wholesale businesses forward as we accelerate the globalisation of our businesses," said Shibata in a press release.

The wholesale division is a newly established business silo encompassing the firm's global markets, investment banking, and other wholesale operations, according to a Nomura announcement yesterday. "The creation of the new division signifies Nomura's commitment to enhancing its global business and will promote greater synergies between the wholesale businesses as well as across regions," the bank said.

Nomura also announced other moves that could be seen as promoting its former Lehman bankers to key global roles. Philip Lynch will become CEO for Asia ex-Japan, also effective April 1. Lynch is currently the firm's CEO for the Middle East and Africa. Previously, he also served as co-head of Lehman Brothers' equity franchise in Europe. He brings to the region 11 years of experience in Asia, including two years as co-head of Lehman Brothers' Asia investment banking division. He will maintain his responsibilities for the Middle East in partnership with Takuya Furuya, chairman of the Middle East and Africa.

"We are delighted that Philip will be returning to the region," Bhattal said in a statement. "He will have an enormous impact to our franchise with his client relationships globally, along with his excellent track record as a global operator and business leader."

Nomura's current CEO for Asia ex-Japan, Minoru Shinohara, will relocate to Tokyo to run Nomura's global equity and debt capital markets new issue business.

Back to Bhattal

The promotion of Bhattal is a turnaround for both Bhattal and Nomura. The former head of Lehman Brothers' Asian operations announced in July that he would step down from his job as chairman of Nomura Asia at the end of 2009. He was to stay on as a senior advisor, but the word was that Bhattal was also going to start up an Asia-focused boutique firm with former Lehman colleagues -- a plan that has now been put on hold. Many boutiques have been launched in the past two years, but the jury is still out on how many will thrive and there's something to be said about the protection of a big bank.

The change of plans at Nomura is no less dramatic. The bank kept its Japanese team for the top positions after it acquired Lehman Brothers' Asian and European operations in September 2008. Integration wasn't a strong point at the top of the pyramid.  

In a further sign of change for the bank, Bhattal will be based in Hong Kong, indicating that Nomura is serious about its intentions to be seen globally as more than just a Japanese bank with some overseas operations.

Bhattal's appointment has already set off a cascading chain of events. Sources say that the promotion is the reason why Sadeq Sayeed, Nomura's chief executive for EMEA, resigned this week after more than a decade with the bank. Sadeeq could not be reached for comment.

But other insiders say that Bhattal's appointment is already boosting morale internally, not only among his former Lehman colleagues who know him well, but from the ranks of Nomura bankers who have gotten to know him during the past two years.

"There's been a crying need for global leadership," said a Nomura banker who declined to be named. "Jesse is the obvious person to do this. He has the respect of all of the key business bankers. To my mind, this should have been done 18 months ago."

The better-late-than-never viewpoint was expressed by another source, who said that Nomura has seen several of its bankers depart recently, most notably ex-Lehman executives Siggi Thorkelsson, head of equities in Asia, and Thomas Siegmund, co-head of fixed income in the region. Siegmund's departure left Jai Rajpal as the sole head of the division.

Of course, former Lehman colleagues who joined Nomura and got a sizable sign-on bonus were always going to be plum targets for cherry-picking once their two-year sweetener package ended.

And, to be fair, not all ex-Lehman bankers are leaving. In January, Nomura announced that it would transfer Glenn Schiffman to the US to head investment banking for the Americas from his role as head of investment banking for Asia ex-Japan. Schiffman had been head of investment banking for Asia-Pacific at Lehman Brothers since 2007, but an American native, he had spent far more years with the bank in the US and was a good candidate for building Nomura's US business. He was replaced in Hong Kong by Colin Banfield and Lehman veteran Patrick Schmitz-Morkramer.

And Nomura has been hiring too. In January this year, it announced the addition of 125 staff to its fixed-income Asia ex-Japan business in order to increase revenue from the region by approximately 30%.

The decision to bring Bhattal back into the fold may be a no-brainer for some, but for Bhattal it will also be high pressure. Onlookers are more forgiving when an outsider is brought in to run a division, on the basis that the new person needs time to get to know the business and build relationships internally. Bhattal knows the bankers and the bank itself; now he has to make it work.

¬ Haymarket Media Limited. All rights reserved.
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