Koji Nagai has had the last laugh. Having withstood pressure from shareholders to quit earlier this year, the Nomura Holdings Inc. chief executive officer looks to be leaving the role on his own terms. Shares of Japan’s biggest brokerage have surged almost 70% since June, when he was reappointed to the board with the narrowest margin of his seven-year reign. He will sense vindication.

Nomura’s renaissance reflects repeated cost-cutting drives and a recovery in investment-banking and trading revenue that enabled the company to report its highest quarterly profit in 17 years at the end of October. Nagai will become Nomura’s chairman on April 1 next year, yielding the CEO post to Co-Chief Operating Officer Kentaro Okuda.

That doesn’t mean Nagai’s tenure can be considered an unqualified success. It took the CEO three major attempts to reverse an over-ambitious attempt to take on Wall Street by acquiring Lehman Brothers’ Asian and European operations in the aftermath of the financial crisis.

His latest effort was the game-changer, a  $1 billion cost-cutting program announced in April that involved significant management restructuring and a 20% reduction in Nomura’s Japanese retail brokerage branches. The early signs of success from that endeavor serve to underline the inadequacy of earlier exercises. In 2012, in his first year, Nagai began retrenching some Lehman employees that Nomura had taken on, but failed to bring down costs sufficiently. About 900 employees lost their jobs  in a 2016 program — still not enough to prevent Nomura’s overseas operation from slipping back into the red in 2018. Nagai’s reluctance to cut deeper and earlier retarded the brokerage’s recovery.

He also failed to change Nomura’s culture. Nagai become CEO after his predecessor Kenichi Watanabe resigned in the wake of an insider-trading scandal. Seven years later, corporate-governance concerns threatened to unseat Nagai too after the firm was penalized for leaking sensitive stock-market information. Proxy adviser Institutional Shareholder Services recommended investors vote against the CEO’s reappointment, saying he should be held responsible. Nagai was re-elected with 61.7% support from shareholders, down from more than 90% in each of the previous six years.

Okuda at least isn’t taking over a company in turmoil, though he was hardly upbeat in addressing the media Monday evening. Nomura faces an even greater sense of urgency than when Nagai took over in 2012, he said. Okuda and Nagai cited the challenge of digitizing its operations, addressing the business impact of Japan’s aging population, and following through on its international structuring. 

Sell-side analysts, who so readily incline toward a positive outlook, agree. Of 10 analysts tracked by Bloomberg, not one has a “buy” rating on Nomura stock. Nine rate the company a “hold,” and one a “sell.” The most international of Japan’s banks, like its domestic peers, still has a reputation for excessive risk aversion and centralized control that values process over profit.

Nomura is still a work in progress.

To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.net

To contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

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