Key Takeaways:
Nomura Holdings reported Q1 net revenue of ¥628 billion, with every division posting higher revenue and profit from the prior quarter.
"The results of the structural reforms implemented over the past few years are now steadily being reflected in our performance," Chief Financial Officer Hiroyuki Moriuchi said.
The Japanese investment bank earned $0.30 per ADR share, beating the $0.22 consensus estimate by 27.5%. Return on equity reached 15.4%, supported by expanding recurring revenue, record overseas earnings and continued investment in the banking business, Moriuchi said. Stable revenues accounted for roughly 60% of total revenue, up from a year earlier.
Wholesale net revenue rose 20% from the prior quarter to ¥369.1 billion, while income before income taxes more than doubled, increasing 116% to ¥93.3 billion. Both were the highest results since the division's creation in April 2010. Global Markets net revenue increased 26% to ¥318.7 billion, with equities revenue surging 41% to ¥179.4 billion on derivatives, execution services and the broader global rollout of established businesses. Fixed-income revenue rose 11% to ¥139.2 billion, aided by stronger client activity in rates, foreign exchange, emerging markets and credit products.
Wealth Management net revenue rose 9% to ¥145.4 billion, and income before income taxes increased 16% to ¥71.1 billion. Revenue and profit increased for a fifth consecutive quarter, and the division generated a pretax profit margin of 49%. Recurring revenue reached a record ¥59.2 billion, while net inflows into recurring-revenue assets hit an all-time high of ¥539.6 billion. Recurring-revenue assets totaled a record ¥31.7 trillion at the end of June, marking the 17th consecutive quarter of net inflows.
Investment Management reported net revenue of ¥98.3 billion, up 14% from the prior quarter, and income before income taxes of ¥45 billion, up 148% — both the strongest performance since the division was established in April 2021. Total assets under management reached a record ¥156.4 trillion at the end of June, aided by favorable market conditions. Alternative assets under management also rose to a new high, supported by net inflows.
Banking net revenue increased 5% to ¥15.2 billion, and income before income taxes rose 19% to ¥3.6 billion. The common equity Tier 1 capital ratio was 12.9% at the end of June, up from 12.8% at the end of March.
The company recently raised its 2030 targets to return on equity of 10% to 12% or more and income before income taxes of at least ¥750 billion. Looking ahead, Moriuchi said Wealth Management revenue since July had been roughly in line with the first-quarter level, with inflows into long-term diversified investment products remaining firm. Wholesale revenue had slowed somewhat in July and was roughly flat from a year earlier, reflecting both a reaction to strong first-quarter equities revenue and typical summer seasonality. Management said it expects market volatility could increase in the second half because of U.S. midterm elections and monetary-policy developments.
The guidance raise signals management expects the structural reforms to continue delivering. Investors will watch the second-quarter results for signs that wholesale momentum can sustain through the seasonal slowdown and into the second half of the fiscal year.
This article is for informational purposes only and does not constitute investment advice.
