Banking Securities Insurance Top News 5 Page  1   2   3   4   5   6   7    Major Securities Companies Shift to a Holding Company System    Meanwhile, the current situation has been made more confusing by the fact that major securities companies also underwent organizational reform and established holding companies, splitting off their retail divisions (sales toward individual investors), wholesale divisions (sales toward corporations), etc. into separate companies under one group.    For example, the Nomura Group consists of such consolidated subsidiaries as Nomura Securities Co., Ltd. (retail and wholesale), Nomura Asset Management Co., Ltd., and Nomura Pension Support & Service Co., Ltd., with Nomura Holdings, Inc. as the holding company. Nomura Research Company, Ltd., although a company affiliated with the Nomura Group, has its own separate group.    The Daiwa Securities Group consists of such subsidiaries as Daiwa Securities Co. Ltd. (retail), Daiwa Securities SMBC Co. Ltd. (wholesale), Daiwa Asset Management Co. Ltd., Daiwa Institute of Research Inc. and Daiwa SB Investments Ltd., with Daiwa Securities Group Inc. as the holding company.    The Nikko Cordial Group also consists of a holding company, Nikko Cordial Corporation, under which there are such subsidiaries as Nikko Cordial Securities Inc. (retail and wholesale), Nikko Beans, Inc. (retail), Nikko Citigroup Limited (wholesale) and Nikko Asset Management Co., Ltd.    In the past, major securities companies used to point to Nomura Securities, Nikko Securities, Daiwa Securities, etc. Today, they indicate the holding companies of major securities companies, such as Nomura Holdings, Daiwa Securities Group and Nikko Cordial Corporation. A Structure in which Bank-affiliated Securities Companies Besiege the Nomura Group    In essence, most of the business rights within the securities industry are in the hands of the four Japanese megabanks, such as Mizuho, Tokyo-Mitsubishi and Sumitomo Mitsui. A structure has been created in which these bank-affiliated securities companies besiege the Nomura Group, an independent that is clearly different from bank-affiliates.    Roughly 10 years ago, bank after bank established securities companies as their subsidiaries and advanced into the business of trading and underwriting securities. However, securities companies had a more difficult time than expected in expanding their sales channels. As a result, subsidiaries were made of various quasi-major or smaller securities companies with which they had close relationships. The reality is that they, including bank-affiliated securities companies, are not having an easy time attracting as much personal assets as they would like to.    Meanwhile, because of the rise of foreign-affiliated securities companies that specialize in large corporations as well as other factors, competition in securing orders in the wholesale business arena has continually become increasingly severe. It has become difficult for divisions that handle large corporations to earn revenues as they did in the past.    In the midst of such circumstances, securities companies are focusing, under the slogan of corporate rejuvenation, on investment banking targeting mid-ranked or smaller companies. They are earning commissions by proposing and executing schemes to support ailing companies, venture firms, etc., as well as proposing and executing schemes for real estate redevelopment. Other measures being taken include the injection of capital through specialized funds and selling off the company being supported after enhancing its value.    One of the aims of the alliances, inclusive of equity participation, between major American investment bank Goldman Sachs Group, Inc. and Sumitomo Mitsui Financial Group, Inc., and between major American securities company Merrill Lynch & Co., Inc. and UFJ Holdings, Inc., was that the Japanese partners wanted to introduce investment banking know-how into their on-site operations. Meanwhile, the Nomura Group, which is aiming to gain dominance in the investment banking field, is leveraging its strength as an independent and making efforts to strengthen ties with regional banks by providing them with financial products, such as investment trusts, as well as by underwriting public stock offerings.