In a shocking development, Japan’s largest investment bank, Nomura, is facing public scrutiny after a former employee was charged with robbery, attempted murder, and arson involving elderly clients. The bank’s CEO, Kentaro Okuda, has taken a 30% voluntary pay cut for three months, with other senior executives following suit.
The Incident That Sparked the Response
The former employee, a 29-year-old wealth manager at the Hiroshima branch, allegedly drugged an elderly client and their spouse, stole cash, and set their house on fire. The individual, who joined Nomura in 2018, was dismissed in August and is now facing legal action.
Nomura’s Public Apology
At a press conference on Tuesday, Okuda and three senior executives offered a formal apology, bowing in unison to express regret. Okuda stated, “We deeply apologise to the victims and others involved for the inconvenience and concern caused. We are truly sorry.”
Reforms and Preventive Measures
Nomura has pledged to overhaul its internal processes to prevent similar incidents in the future. Key changes include:
- Enhanced Supervision: Managers will accompany employees during home visits and monitor phone calls around the time of these visits.
- Updated Recruitment Policies: A more rigorous hiring process to ensure ethical conduct.
- Ethics Training: Comprehensive programs to educate staff on professional and ethical standards.
- Early Detection Mechanisms: Strengthened protocols to identify employee misconduct early.
Financial Impact and CEO’s Previous Pay Cuts
This is the second recent pay cut for Okuda, who previously returned 20% of his salary for two months following a fine for manipulating government bond futures. Despite these scandals, Nomura reported strong profits of ¥98.4bn (£518m) between July and September, more than double the same period last year.
Minimal Client Impact
The bank confirmed that account closures following the incident were minimal, indicating that client trust has largely been retained.
Nomura’s Resilience
Despite the controversies, Nomura’s stock has risen by 54% over the past year, driven by strong performances in investment banking and wealth management.
