Nomura, the Japanese securities group, has blamed Terra Firma, the UK buy-out firm run by its former star banker Guy Hands, for sending its merchant banking division into the red in the last quarter.

Nomura reported a pre-tax loss of Â¥4.8bn (€35m) for its merchant bank last week, after net revenues slumped from Â¥7.3bn for the three months to the end of September last year to a loss of Â¥2.3bn.