A pedestrian walks past an illuminated sign at Nomura Securities Co., a unit of Nomura Holdings Inc., in Tokyo, Japan.
Kiyoshi Ohta | Bloomberg | Getty Images
Nomura Holdings, Japan’s largest brokerage and investment bank, reported a 195% rise in first-quarter profit on Tuesday as a rebound in global markets and a pickup in domestic inflation boosted demand for its wealth management services.
The results show that Nomura has made progress in moving to a fee-based profit model to ensure that revenue is more stable and less susceptible to market fluctuations.
Nomura Securities said net profit for the April-June period was 68.9 billion yen ($446 million), compared with 23.3 billion yen in the same period last year.
Nomura Securities Chief Financial Officer Takumi Kitamura told a media briefing that the end of deflation in Japan has encouraged retail customers to turn to investment products.
“Since last spring, significant updates to our business structure have shifted the mindset of our customers from saving to investing, which means we have been able to deliver strong results,” Kitamura said.
In addition, rising global markets led to improved customer sentiment and increased sales of U.S. and global equity funds, Nomura Securities said.
The wealth management segment’s pre-tax income increased by 84% year-on-year, reaching the highest level since the 2015/16 fiscal year.
Nomura dominates Japan’s wealth management sector, with the business accounting for about half of pretax profits last fiscal year.
Inflows from Nomura’s investment management business pushed assets under management to a record 92.5 trillion yen, while the wholesale business of its investment banking and trading business grew 22% compared with the same period last year.
Japan’s investment banking business has performed strongly due to a series of delistings, business restructuring and cross-border transactions. However, international transactions have slowed.
“Our investment banking numbers compare a little unfavorably to those of U.S. investment banks, but seasonality comes into play and when they get into trouble, we outperform them,” Kitamura said.
Cost-cutting measures taken over the past year to improve weak profitability also bore fruit in the quarter.
Group-level return on equity (ROE), a measure of profitability, surged to 8.1% between April and June, well above the 5.1% achieved by Nomura in the year to March 2024.
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