Pedestrians walk past a brightly lit space for Nomura Securities Co., a unit of Nomura Holdings Inc. in Tokyo, Japan.
Kiyoshi Ota Bloomberg Getty Images
Nomura Holdings, Japan’s largest brokerage and investment bank, reported a 195% jump in first-quarter profit on Tuesday as a rally in global markets and the return of domestic inflation boosted demand for wealth management services.
The results show that Nomura has made progress in changing to a fee-based profit model to secure more consistent revenue that is less subject to market fluctuations.
Nomura said net profit in the April-June period was 68.9 billion yen ($446 million) versus 23.3 billion yen a year earlier.
The end of deflation in Japan has encouraged retail clients to switch to investment products, Nomura chief financial officer Takumi Kitamura told a media briefing.
“Major efforts to structure our business since last spring and the change in customer mindset from savings to investment means we can achieve strong results,” Kitamura said.
In addition to this, the global market rally led to improved client sentiment and higher sales of US and global equity funds, Nomura said.
Pre-tax income in the wealth management segment grew by 84% compared to the same period last year to the highest since the 2015/16 financial year.
Nomura holds a dominant position in wealth management in Japan and the business accounted for about half of its pre-tax profit in the previous financial year.
Inflows into Nomura’s investment management business pushed assets under management to a record 92.5 trillion yen while the wholesale business, which includes investment banking and trading, increased 22% compared to the same period last year.
Investment banking has strengthened in Japan due to several delistings, business reorganizations and cross-border transactions. But international deals are slowing down.
“Our investment banking numbers compare a bit poorly with US investment banks, but seasonal factors are at play and we’re losing when we’re struggling,” Kitamura said.
Cost-cutting measures launched last year to boost flagging profits also bore fruit this quarter.
Return on equity (ROE), a measure of profitability, at group level rose to 8.1% during April-June, surpassing Nomura’s 5.1% achieved during the year ending March 2024.
