Steinhoff burns another – Nomura said to lose $128 million in margin loan


Nomura Holdings has joined the growing list of banks that got burned by the meltdown at South African retailer Steinhoff International Holdings NV.

Source: Steinhoff burns another – Nomura said to lose $128 million in margin loan –

A pedestrian walks past signage displayed at a Nomura Securities Co. branch, a unit of Nomura Holdings Inc., in Tokyo, Japan. Photographer: Kiyoshi Ota/Bloomberg

U.S. banks disclosed more than $1 billion of mark-to-market losses and charge-offs on margin loans related to Steinhoff when they reported earnings in January. UBS Group AG also booked credit losses stemming from its exposure to the retailer, a person with knowledge of the matter said last month. Other European banks are likely to be impacted as well.

In 2016, Nomura was among international banks that provided a 1.5 billion-euro ($1.9 billion) margin loan backed by 628 million Steinhoff shares that were pledged by the company’s Chairman Christo Wiese. Shares of the South African retailer have slid more than 80 percent since it announced Dec. 5 that it had uncovered accounting irregularities.

Nomura’s unrealized loss was shared equally by its operations in Europe and Asia excluding Japan, according to its earnings presentation. It contributed to a drop in the Tokyo-based firm’s overseas pretax profit, which shrank to 1.7 billion yen from 31.4 billion yen a year earlier.