Aozora Bank, with over JPY5.68 trillion (USD48.1 billion) in assets, plans to launch a credit derivatives trading operation in Japan that will eventually offer credit-linked notes and synthetic collateralized debt obligations. "This market is expanding steadily and there are good opportunities for business flows and profit," said Keji Sugimoto, general manager of derivatives and structured finance. Sugimoto said the bank has hired Ishigaki Toshiya, credit trader at UBS Warburg in Tokyo, to kick-start the trading effort. Toshiya, who starts next month, could not be reached.
Aozora will look to handle both customer flows and trade a proprietary book. "We're just in the first stage but in the long run we want to be a big market-maker," added Sugimoto. He plans to hire two traders to join its existing 15-strong marketing team.
At UBS, Toshiya reported to Lee Knight, managing director in the fixed income division in Tokyo. Officials close to the firm said that UBS brought aboard Chisachi Ohno, director at Merrill Lynch, last month to assume Sugimoto's duties. Knight and Ohno declined comment.