Rakuten needs money – and lots of it – as its mobile telecommunications arm continues to burn cash. But it is running out of things to sell, while its debt profile is miserable.

With the advent of its strategic alliance with Japan’s Mizuho Financial, Lombard Odier now has wealth management tie-ups in seven Asia countries, with the promise of more to come.

For one, it brings power to its digital operations, for the other a much-needed injection of funds. But it doesn’t change a grim operating environment.

SMBC’s tie-up with Jefferies is only the latest in a series of acquisitions, partnerships and initiatives it has undertaken from India to Vietnam to Wall Street. Now, says president and chief executive Jun Ohta, it is time to make them work.

Kentaro Okuda had been delivering. Nomura was reporting strong and sustainable profits, with a streamlined international business driven by trading in the Americas. Then came Archegos.

Squeezed by negative rates on one side and an ageing population on the other, Japan’s banks have never had it so tough. Euromoney examines their potential to break free from these constraints.

Mizuho 'intends to transition to the next generation of financial services' – here the bank's CEO explains what that means.

Local banks believe that reinventing wealth management will supply them with domestic growth in a dismal macro environment. But the challenge is that the bulk of assets are held by elderly people, who aren’t used to investment, aren’t used to paying for it and don’t care much about digital innovation.

Japanese banks must go overseas to build sustainable profits, each in their own way. Nomura is streamlining global operations and applying itself in China; Daiwa wants to be a global mid-market M&A house; MUFG has bought Asean banks; Mizuho prefers organic growth; and SMBC is somewhere in between. Who’s ahead?

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The bank has come a long way in the GTS business in a short time – it took the top spot in Japan last year, and the last 12 months have been about establishing itself in the rest of Asia.

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Amid a sharp slowdown in institutional trading volume of Japanese government bonds, Mizuho Securities and Mitsubishi UFJ Morgan Stanley Securities have held their position as the market’s leading dealers.

FX volumes executed by Japanese banks have shown a marked improvement in recent years. The biggest improvers in market share in Euromoney’s FX survey this year were Nomura and Mizuho Financial Group, registering increases of 97% and 68% respectively. That saw Nomura rise four places to 14th and Mizuho rise 11 places to 23rd. This rapid improvement is due to one dominant factor: doing more business with real money clients.

Reluctant investors under pressure to buy, while bookrunners await fee bonanza; Analysts say extra capital will not solve banks’ inherent problems

Reluctant investors under pressure to buy, while bookrunners await fee bonanza; Analysts say extra capital will not solve banks’ inherent problems

It was another miserable 12 months for Japan’s banks, with the three megabanks, the tier below them and the smaller regional banks all suffering as domestic bankruptcies from the plummeting economy caused NPL levels to rise and Lehman Brothers-related investments turned bad. Total losses from bad loans among the top banks amounted to ¥1.7 trillion ($17.6 billion) and the three largest financial groups – MUFG, Mizuho FG and SMFG – all reported heavy losses for the year. That left Resona Holdings, Euromoney’s best bank in Japan in 2007, as this year’s winner after the group posted a profit of ¥123 billion despite the hellish environment.

Relatively untroubled by sub-prime losses and well-endowed with deposits, Japan’s banks are still enthusiastic lenders. But the bulk of their advances are still domestic – sometimes to potentially shaky borrowers. Will they expand further in lending in international markets? Chris Wright reports.

Japan’s largest banks are mulling the possibility of more capital raising after the Nikkei 225 stock index plunged to a 26-year low and left them looking vulnerable. Mitsubishi UFJ Financial Group, the country’s largest bank, announced on October 27 that it will issue up to ¥600 billion in common shares and up to ¥390 billion in preferred. Mizuho Financial Group and Sumitimo Mitsui Financial Group have been reported by local media to be considering similar measures.

Government intervention shows that there is real cause for concern.

Have the big Japanese banks been over-cautious about buying stakes in troubled western peers?

The chief executives of 11 of the world's biggest banks discuss the lessons they have learnt from the global financial crisis, their concerns over a regulatory backlash, and how they plan to rebuild profitability in the toughest markets in history.

Hidetake Nakamura, managing executive officer and head of international banking unit.

Mizuho Corporate Bank and its German subsidiary have together bought a Russian bank, Michinoku Bank (Moscow), completing the purchase of 100% of all 10 million outstanding shares on January 21.

In December 2006, Mizuho unveiled Alexander Rekeda, Doug Munson, Jim Shepard, Bill Budd and several others as part of its new structured credit and debt capital markets team in New York. The bankers had formerly worked at Calyon, covering various areas of structured finance and debt.

Japan still boasts the world’s second-largest economy but its investment banking markets remain immature compared with western peers. In two articles, Euromoney spoke to key bankers in Tokyo about the economic renaissance and what it means for investment banking in Japan. Chris Leahy reports.