Nomura (NMR) - 2022 Q2 - Quarterly Report

Part I Corporate Information Item 1. Information on Company and Its Subsidiaries and Affiliates This section details key financial data showing decreased net income and provides a stable business overview for the period Selected Financial Data Selected Financial Data (Six Months Ended September 30) | Indicator | 2020 (Mil yen) | 2021 (Mil yen) | Change | | :--- | :--- | :--- | :--- | | Net revenue | 829,745 | 672,141 | -19.0% | | Income before income taxes | 265,438 | 97,000 | -63.5% | | Net income attributable to NHI shareholders | 210,158 | 51,700 | -75.4% | | Net income per share—basic (Yen) | 68.87 | 16.76 | -75.7% | - Total assets increased slightly to ¥43,346.6 billion as of September 30, 2021, from ¥42,684.4 billion a year prior, while total equity saw a slight increase to ¥2,801.6 billion from ¥2,786.1 billion[13] - Cash flows from operating activities shifted from a significant inflow of ¥823.0 billion in the six months ended Sep 30, 2020, to an outflow of ¥222.6 billion in the same period of 2021[13] Business Overview - There were no significant changes to the businesses of the Company and its 1,324 consolidated subsidiaries for the six months ended September 30, 2021[15] - As of September 30, 2021, the company had 15 affiliated companies which were accounted for by the equity method[15] Item 2. Operating and Financial Review This section reviews operational performance, financial results, and risk management, noting the impact of a U.S. Prime Brokerage Event Risk Factors - The company highlights the significant losses incurred from the "U.S. Prime Brokerage Event" in March 2021, following the default of a U.S. prime brokerage client[18] - Additional losses of ¥65.4 billion related to the U.S. Prime Brokerage Event were recognized in the three months ended June 30, 2021[18] Operating, Financial and Cash Flow Analyses by Management Overall Operating Results (Six Months Ended September 30) | Metric | 2020 (Mil yen) | 2021 (Mil yen) | | :--- | :--- | :--- | | Net revenue | 829,745 | 672,141 | | Non-interest expenses | 564,307 | 575,141 | | Income before income taxes | 265,438 | 97,000 | | Net income attributable to NHI shareholders | 210,158 | 51,700 | Income (Loss) Before Income Taxes by Segment (Six Months Ended Sep 30) | Segment | 2020 (Mil yen) | 2021 (Mil yen) | | :--- | :--- | :--- | | Retail | 37,894 | 36,006 | | Investment Management | 34,221 | 59,942 | | Wholesale | 153,346 | (3,388) | - The Wholesale segment's loss was primarily due to losses of ¥65.4 billion arising from transactions with a U.S. client[28] - In April 2021, the Investment Management Division was newly established, replacing the Asset Management and Merchant Banking Divisions, and segment reporting has been updated to reflect this change[21] Significant Contracts - There were no significant contracts to report for the period[124] Item 3. Company Information This section outlines the company's share capital structure, including authorized shares, major shareholders, and voting rights Share Capital Information Share Capital as of September 30, 2021 | Type | Number of Shares | | :--- | :--- | | Authorized Common Stock | 6,000,000,000 | | Issued Common Stock | 3,233,562,601 | - The Master Trust Bank of Japan, Ltd. (Trust Account) is the largest shareholder, holding 13.37% of issued shares as of September 30, 2021[131] - The company held 138,446,000 shares of treasury stock as of September 30, 2021, representing 4.28% of issued shares[131][136] Item 4. Financial Information This section presents the unaudited U.S. GAAP consolidated financial statements, including balance sheets, income statements, and cash flows Consolidated Financial Statements Consolidated Balance Sheet Highlights (As of Sep 30, 2021) | Item | Amount (Mil yen) | | :--- | :--- | | Total Assets | 43,346,552 | | Total Liabilities | 40,544,920 | | Total NHI shareholders' equity | 2,734,086 | Consolidated Statement of Income (Six Months Ended Sep 30, 2021) | Item | Amount (Mil yen) | | :--- | :--- | | Total revenue | 784,381 | | Net revenue | 672,141 | | Income before income taxes | 97,000 | | Net income attributable to NHI shareholders | 51,700 | - The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP)[141] Other Exhibits Confirmation Letter The Group CEO and CFO confirm the appropriateness of the quarterly securities report under the Financial Instruments and Exchange Act - Kentaro Okuda, Group CEO, and Takumi Kitamura, CFO, confirmed the appropriateness of the quarterly securities report[586] Capitalization and Indebtedness This section provides a snapshot of the company's consolidated capitalization and indebtedness as of September 30, 2021 Capitalization and Indebtedness as of September 30, 2021 | Item | Amount (Mil yen) | | :--- | :--- | | Short-term borrowings | 1,188,794 | | Long-term borrowings | 8,695,951 | | Total NHI shareholders' equity | 2,734,086 | | Total equity | 2,801,632 | | Total capitalization and indebtedness | 12,686,377 | - The company notes that there has been no material change in its capitalization and indebtedness since September 30, 2021[590]