TOKYO (Bloomberg) -- Mizuho Financial Group Inc., Japan’s second-largest bank by revenue, will start electronic trading in Asia after hiring a team of 16 former Lehman Brothers Holdings Inc. employees, two executives familiar with the plan said.

The team, led by Anthony Brooker, the former head of electronic trading sales for Lehman in Asia, will target hedge funds and institutional investors with electronic products and systems for equities trading, the executives said. They declined to be identified as the plan isn’t public.
Mizuho, which cut its full-year profit forecast 55 percent on Oct. 31 because of rising bad loans and investment losses, is building its equity trading business in Asia to challenge Nomura Holdings Inc. Brooker was among hundreds of Lehman employees who opted to join competitors rather than staying with Nomura after the firm agreed to buy Lehman operations in Asia, the Middle East and Europe. Nomura is taking over about 8,000 Lehman workers following the Wall Street firm’s collapse in September.
“It’s positive to see Mizuho expanding its commission business, as it can’t make much money from lending or investment banking,” said Makoto Haga, president of Wing Asset Management Co., a Tokyo-based hedge fund.
Mizuho’s new team members, who started work last week, also include senior trader Nobuo Wazaki, the people said. Toshimitsu Okano, a spokesman for Mizuho’s securities unit, declined to comment.
-----Strong player
Electronic trading is an area where Lehman has been a “strong player,” Tokyo-based Nomura said in a Sept. 22 statement. Brooker’s team may be able to lure new clients by offering computer-driven algorithmic trading, which is often used by hedge funds, Haga said.
“It’s common practice among hedge funds not to place orders with brokerages that have weak algorithmic trading,” he said.
More than 100 former Lehman workers in Asia have sought work elsewhere rather than staying with Nomura, landing jobs at firms including Barclays Plc and Merrill Lynch & Co.Daiwa Securities Group Inc., Japan’s second-largest brokerage, said Oct. 31 it hired two senior bankers who worked at Lehman to expand its derivatives business.
Anthony Steains, Lehman’s head of industrials in Asia, left for Blackstone Group LP, taking a team of bankers with him, and James Chapman joined Merrill Lynch & Co. as head of Asia power investment banking.
Mizuho rose 2.3 percent to close at 284,300 yen in Tokyo trading, trimming its year-to-date loss to 47 percent. Nomura gained 2.9 percent. Tokyo-based Nomura announced a wider-than- expected quarterly loss on Oct. 28 and said it may spend $2 billion to integrate former Lehman employees.
Mizuho’s securities unit posted a loss of 19.8 billion yen for the six months ended Sept. 30 as revenue fell 40 percent from a year earlier. The division’s brokerage commissions, which made up the biggest portion of revenue, declined to 9.3 billion yen from 12.2 billion yen.