Nomura joins list of banks burnt by Steinhoff meltdown

In its fiscal third-quarter earnings report on Thursday, Japan’s biggest brokerage said it booked an unrealised loss of about ¥14bn ($128bn) relating to an unidentified margin loan. The loss was tied to Steinhoff, people with knowledge of the matter said, asking not to be identified discussing a private transaction.

US banks disclosed more than $1bn of mark-to-market losses and charge-offs on margin loans related to Steinhoff when they reported earnings in January.

• READ: Bank of America's $292m charge tied to Steinhoff turmoil

UBS 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 $1.9bn margin loan backed by 628 million Steinhoff shares that were pledged by the company’s chairperson Christo Wiese.

Shares of the South African retailer have slid more than 80% since it announced December 5 that it had uncovered accounting irregularities.

Nomura’s unrealised 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 ¥1.7bn from ¥31.4bn a year earlier.