Nomura
Holdings Inc. reported its highest quarterly profit in four and a half years,
as Japan’s largest brokerage capitalized on robust trading revenues and a surge
in investment banking deals amid favorable market conditions.
Nomura Posts Best
Quarterly Profit Since 2020 on Strong Trading, Banking Gains
The
Tokyo-based financial giant posted a pretax profit of 138.3 billion yen ($879
million) for the fiscal third quarter ended December 31, marking a 76% jump
from the previous year. Net income more than doubled to 101.4 billion yen ($644
million), while revenue climbed 25% to 502 billion yen ($3.2 billion).
Although
key financial indicators showed a slight decline compared to Q2, they
rose significantly from Q1, when net income stood at 68.9 billion yen ($428
million).
The results
reflect Nomura’s successful pivot toward more stable revenue streams and
international expansion, with overseas operations contributing approximately
40% of firmwide profits. The company’s return on equity reached 11.8%,
exceeding its target range of 8-10%.
“We
are seeing the results of our medium to long-term strategy to strengthen our
business portfolio by growing our stable revenues and diversifying our revenue
streams, while effectively controlling costs and capital,” said Kentaro
Okuda, Nomura’s President and Group CEO. “This reinforces our confidence
in our current direction.”
Trading and Investment
Banking on the Rise
The
Wholesale division, which houses Nomura’s trading and investment banking
operations, recorded its best quarterly performance since 2021, with pretax
income surging 171% year-on-year to 62.4 billion yen ($397 million). Investment
banking revenues hit their highest level since 2017, boosted by advisory
services and financing solutions.
Wealth
Management also continued its winning streak for the seventh consecutive
quarter, with pretax income rising 45% year-on-year to 46.2 billion yen ($294
million), supported by record-high recurring revenue. The Investment Management
division saw assets under management reach new heights, although its quarterly
profit declined 41% from the previous quarter to 18.9 billion yen ($120
million).
For the
nine-month period, Nomura’s net income surged 146% to 268.8 billion yen ($1.7
billion), positioning the firm well to achieve its annual pretax income target
of over 500 billion yen ($3.2 billion).
Our Group CEO Kentaro Okuda comments on our 3Q 2024-25 #financialresults. View full announcement here: https://t.co/FLI96kEnaq pic.twitter.com/Lmi1U5GBiB
— Nomura (@Nomura) February 5, 2025
“Looking
ahead, we will continue to intensify our global strategy leveraging our Japan
franchise to consistently achieve ROE of 8 to 10 percent or more and pretax
income of over 500 billion yen,” Okuda concluded.
Nomura Revamps FX Options Unit
Nomura Holdings is restructuring
its foreign exchange (FX) options division following a series of staff
departures from key trading hubs. The Japanese financial institution’s decision
signals a shift in its derivatives strategy, according to industry sources.
Over the past year,
approximately eight traders have left the bank’s London and New York offices,
many of whom had joined since 2022. Despite this turnover, the FX options
division has generated $60 million in revenue since April, surpassing the
previous fiscal year’s $50 million. The unit benefited from trading
opportunities tied to the U.S. elections, with a rally in the dollar index
during Donald Trump’s victory creating favorable market conditions.
Additionally, Nomura has seen a
400% rise in client algorithmic FX trading activity since January 2023. This
growth comes as the firm adjusts its leadership structure; two months ago, John
Tierney was appointed CEO of Nomura Europe Holdings and Nomura International,
succeeding Jonathan Lewis after his ten-year tenure.
This article was written by Damian Chmiel at www.financemagnates.com.
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