The results are for the period up to the end of March and do not account for the market turmoil that followed the U.S. tariff announcements in April, however Nomura can ride out the volatility, its chief financial officer said.
“A certain degree of volatility really works in favour of our business,” CFO Takumi Kitamura said at an earnings briefing.
Although individual customers’ investment activity slowed, there had been no rush to sell assets since the start of April.
Meanwhile volatility had widened margins in equity and foreign exchange trading in Nomura’s markets unit such that revenue trends were above levels in the three months to March, Kitamura said.
Nomura reported a profit of 72 billion yen ($501.15 million) for the January-March period, versus 56.8 billion yen in the same period a year prior, and announced a share buyback of up to 60 billion yen. Nomura has cemented a dominant position among Japanese securities firms and its earnings in recent quarters have comfortably exceeded those of rivals Daiwa Securities and Mizuho Securities. Its investment management division reached record business revenue for a fifth consecutive quarter, but assets under management at the end of the quarter fell due to a fall in share prices.
Recurring revenue in the wealth management division reached a record high, boosted by strong investment advisory fees.
Asset management has become a core growth area for Japanese financial institutions which are looking to secure stable fee-based revenue that is less impacted by the ups and downs of market sentiment.
Towards that end, Nomura is acquiring Australian Macquarie Group’s U.S. and European public asset management businesses for $1.8 billion in cash, marking its most ambitious expansion abroad since its failed purchase of Lehman Brothers’ assets in 2008.
Income in Nomura’s wholesale division, which houses its investment banking and global markets units, grew 82% compared to the same period the previous year as equity revenues in the global markets division and investment banking revenues rose.
Although market volatility has led to many companies adopting a wait and see approach and holding off on equity issuance or M&A, when markets calm activity should return to normal, Kitamura said.
($1 = 143.6700 yen)
