Nomura Securities Plans Aggressive Store Expansion – Is Nomura the Way to Play Japan’s Coming Rush of Retirees Flush with Savings? (NMR, MTU)
The U.S. is not the only place that experienced a baby-boom. Japan had one of its own and the boomers are going to begin entering retirement over the next few years. It’s no secret that these soon-to-be retirees control a tremendous amount of assets, largely in the form of cash savings, which currently are held in postal savings accounts yielding negligible interest. Nomura Securities (subsidiary of Nomura Holdings (NMR)) sees mouth watering opportunity and is taking action to ensure it is a top choice for retirees to entrust their money. The following is my translation of a Japanese language article covering Nomura’s strategy.
Nomura Securities is the largest securities company in Japan and it’s about to get larger -- much larger. It currently has 133 store-locations and is planning to increase that number by 50-100 by 2008. That’s a rather large range but even using the lower number represents a 37.5% increase.
Nomura sees 2007 as the beginning of a large wave of retirees among the baby-boom generation. At the same time it is eying increasing new graduate hire numbers which exceeded 500,000 in 2005 and will jump to 700,000+ this year. (Therefore, I believe there is such a discrepancy in the range of planned new stores.) Its main priority however is the baby-boom generation as Nomura is a full-service brick-and-mortar securities firm that wants to cater to the old school and at the same time expand its offerings to the younger generation. This planned expansion is Nomura’s largest since the bubble in the 80’s.
It’s estimated that the baby-boom generation has over US$427 billion in retirement funds that banks, securities companies, and other financial institutions are aggressively pursuing.
Nomura’s leadership and ambitious expansion plans are seen as bringing more intensity to the competition among rivals who already have or will be introducing their own expansion plans.
Nomura will open its new stores primarily in areas where large numbers of retirees live, which means a majority of the stores will be located in the Tokyo and Osaka metropolises.
Not limiting itself solely to securities, Nomura is striving to offer broad financial management and advising by establishing the nation’s largest network of financial planners with a target of 7,000 FPs.
In October 2003 Nomura’s assets under management totaled US$325 billion. As of September 2005 this number jumped to US$427 billion.
A Nomura Securities executive was quoted saying, “In competing against the mega banks (i.e. Mitsubishi UFJ Financial Group (MTU) and Japan Post, it’s important to build an overwhelming consumer base.
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