Japan's Largest Stockbroker Admits Crisis As Losses Mount

Nomura, which last month bought Lehman Brothers' operations in London, was last night caught in a spiral of losses and asset write-downs, which it admitted had left the business in crisis.

Japan's largest stockbroker registered its third quarterly loss in a row after a collapse in the sale of credit derivatives as well as write-downs on holdings in Iceland and a high-profile hedge fund.

The ratings agency Moody's said the situation prompted a review of the broker's credit position amid "growing concern that Nomura's profitability will remain under pressure because of the downturn in the global capital markets."

Net losses widened to 72.9bn yen (£477m) compared with ¥11.7bn a year ago, the broker said. It blamed trading losses on the collapse of the Nikkei index to a 26-year low, which in turn had discouraged clients from dealing in shares or raising money for buyouts.

Nomura owns 55m shares in Fortress Investment Group, which had been valued at $12 but recently fell below $4 a share. A $425m (£270m) investment in the bonds of Icelandic banks was also considered almost worthless.

"I just don't see any light at the end of the tunnel," said Yuin Lim, who covers the broker at CLSA.

Nomura's chief financial officer, Masafumi Nakada, said: "Management takes it very seriously that we have posted three consecutive quarterly losses. We feel a sense of crisis."

Standard Chartered, by contrast, said it had survived slowing Asian markets to make good progress in the third quarter. Its shares pushed up 14% to 777p.