Wires

UPDATE 2-Japan's Nomura picks Okuda to pursue turnaround as new CEO

Takashi Umekawa

(Adds details, quote, background on Okuda's promotion)

TOKYO, Dec 2 (Reuters) - Nomura picked Kentaro Okuda to lead a turnaround of Japan's biggest brokerage and investment bank on Monday, taking over from chief executive Koji Nagai, who will become chairman.

The reshuffle was announced as Nomura posted its strongest quarterly profit in more than 17 years. The brokerage is pursuing a cost-cutting campaign after last year recording its first annual loss in a decade.

Okuda, 56, became a contender to replace Nagai when he was promoted to joint chief operating officer last year.

Nomura's reputation took a hit in May when it was censured by regulators after it was found to have leaked information related to listing and delisting criteria to clients.

That led the government to omit it as an underwriter in a Japan Post share sale and Nagai taking a 30% pay cut for three months.

The incident came a month after Nomura reported an annual loss and said it would not pay bonuses to directors.

Nagai, 60, told a news conference on Monday that there was no direct connection between the management change and the information leakage scandal.

"I have been working with Okuda on business improvement plan after information leak in May. Im not worried about him taking over because I know he can continue that effort," Nagai said.

While its bottom line improved in the last quarter thanks to a recovery in its wholesale division, Nomura is still in the middle of a restructuring which includes more than $1 billion in cost cuts and the closure of some of its retail branches.

Nomura said in October it had achieved about 60% of the 140 billion yen ($1.3 billion) in targeted cost cuts.

Nagai, a Nomura veteran, took the helm in 2012, after the previous CEO resigned over an insider trading scandal.

Okuda, who joined Nomura in 1987 and became co-chief operating officer in April 2018, will become CEO on April 1, 2020. ($1 = 108.6400 yen) (Reporting by Tokyo bureau; Editing by Edmund Blair and Alexander Smith)