Financial Data and Key Metrics Changes - Group-wide net revenue was JPY 515.5 billion, down 2% from the previous quarter, while income before income taxes fell 15% to JPY 136.6 billion, and net income decreased by 12% to JPY 92.1 billion [3][4] - Excluding gains from real estate sales in the previous quarter, net revenue increased by 10%, and net income rose by 40%, indicating steady growth [3] - Earnings per share for the quarter were JPY 30.49, and return on equity was 10.6%, meeting the quantitative target for 2030 of 8%-10% for the sixth consecutive quarter [3][22] Business Line Data and Key Metrics Changes - Wealth Management net revenue increased by 10% to JPY 116.5 billion, with income before income taxes growing 17% to JPY 45.5 billion, marking the highest income in about 10 years [8] - Investment Management net revenue reached JPY 60.8 billion, up 20%, with income before income taxes amounting to JPY 30.7 billion, up 43% [10] - Wholesale division net revenue was JPY 279.2 billion, up 7%, with Global Markets net revenue increasing by 6% and Investment Banking net revenue rising by 15% [13] Market Data and Key Metrics Changes - Recurring revenue assets in Wealth Management totaled JPY 26.2 trillion at the end of September, with net inflows of JPY 289.5 billion [10] - Assets under management in Investment Management surpassed JPY 100 trillion, with net inflows of JPY 498 billion [11] - The Banking Division's net revenue remained flat at JPY 12.9 billion, with income before income taxes falling 12% to JPY 3.2 billion due to higher costs [15] Company Strategy and Development Direction - The company aims to transform Japan into an asset management powerhouse by building trust with clients and providing tailored asset management services [23] - The focus remains on self-sustaining growth in Wholesale, with a commitment to maintaining a balance between investment opportunities and shareholder returns [29][55] - The company is preparing for the introduction of a deposit sweep service in the next fiscal year, indicating a strategic move to enhance its banking services [15] Management's Comments on Operating Environment and Future Outlook - Management noted that stock indices in Japan and other major economies rose significantly, contributing to strong earnings and stable revenue sources [21][22] - The company expects continued strong performance in Wealth Management and Investment Banking, with a solid pipeline of corporate actions anticipated [24][60] - Management expressed confidence in maintaining a return on equity of at least 8% even in potential economic slowdowns, focusing on building earnings capability [62] Other Important Information - Group-wide expenses increased by 4% to JPY 378.8 billion, driven by higher compensation and benefits due to performance-linked bonuses [16] - The impact of phishing scams on profits was JPY 4.8 billion, with measures taken to enhance security and reduce future risks [20][21] - The Common Equity Tier 1 ratio at the end of September was 12.9%, within the target range, but expected to decrease post-Macquarie acquisition [18] Q&A Session Summary Question: Regarding personnel expenses and CET1 ratio - Management acknowledged the increase in compensation and benefits due to bonuses and retirement payments, and confirmed a commitment to a 40% dividend payout ratio [26][28] Question: Market revenue and risk-taking - Management indicated that credit trading contributed solidly to revenue, with a focus on high-quality deals while being mindful of concentration risks [32][34] Question: October revenue environment and tax burden - Management noted that Wholesale division revenue is strong but at a similar level to Q2, and explained the increase in tax burden due to various technical factors [42][44] Question: Investment Banking pipeline and ROE - Management highlighted a strong advisory pipeline in Japan and expected normalization in ECM, while confirming that base ROE is improving and discussions on target profit levels are ongoing [58][62]

Financial Data and Key Metrics Changes - Group-wide net revenue was ¥515.5 billion, down 2% from the previous quarter, while income before income taxes fell 15% to ¥136.6 billion and net income decreased 12% to ¥92.1 billion [3] - Excluding gains from real estate sales in the previous quarter, net revenue increased by 10% and net income rose by 40%, indicating steady growth [3] - Earnings per share for the quarter were ¥30.49, and return on equity was 10.6%, achieving the quantitative target for 2030 for the sixth consecutive quarter [3][20] - Income before income taxes in international regions rose 63% to ¥44.9 billion, marking the ninth consecutive quarter of profitability [3] Business Line Data and Key Metrics Changes - Wealth Management net revenue increased 10% to ¥116.5 billion, with income before income taxes growing 17% to ¥45.5 billion, the highest in about 10 years [7] - Investment Management net revenue reached ¥60.8 billion, up 20%, and income before income taxes amounted to ¥30.7 billion, up 43% [9] - Wholesale division net revenue came to ¥279.2 billion, up 7%, with Global Markets net revenue increasing by 6% and Investment Banking net revenue rising by 15% [12] Market Data and Key Metrics Changes - Recurring revenue assets in Wealth Management saw a net inflow of ¥289.5 billion, totaling ¥26.2 trillion at the end of September [8][9] - Investment Management achieved assets under management exceeding ¥100 trillion, with net inflows amounting to ¥498 billion [10] - The overall trend in the market showed strong client activity and revenue growth, particularly in equities and investment banking [12][20] Company Strategy and Development Direction - The company aims to transform Japan into an asset management powerhouse by building trust with clients and providing tailored asset management services [21] - The focus remains on self-sustained growth in Wholesale, with a commitment to maintaining a balance between investment opportunities and shareholder returns [27][41] - The management is proactive in enhancing security measures to protect against phishing scams, which have impacted profits [18][19] Management's Comments on Operating Environment and Future Outlook - The management noted that stock indices in Japan and other major economies rose steeply, contributing to strong earnings [20] - There is an expectation of continued strong performance in Wealth Management and Investment Banking, with a solid pipeline of opportunities [21][44] - The management is cautious about potential normalization in equity performance but remains optimistic about maintaining stable revenues [39][41] Other Important Information - The company plans to pay a dividend of ¥27 per share, resulting in a dividend payout ratio of 40.3% [6] - Group-wide expenses increased by 4% to ¥378.8 billion, with compensation and benefits rising due to performance-linked bonuses [15] - The CET1 ratio at the end of September was 12.9%, within the target range, but expected to decrease post-acquisition of Macquarie Group's U.S. asset management business [17] Q&A Session Summary Question: Concerns about personnel expenses and CET1 ratio - The CFO acknowledged that compensation and benefits increased due to bonuses linked to earnings and larger-than-usual retirement payments [26] - Regarding the CET1 ratio, the company remains committed to a 40% dividend payout and a total payout ratio of 50% or above, balancing shareholder returns with investment opportunities [27] Question: Market revenue and risk-taking - The CFO explained that while credit trading contributed solidly to revenue, the company is mindful of concentration risks and is selective in deal-making [29][30] Question: October revenue environment and tax burden - The CFO indicated that fixed income trends are strong, and overall Wholesale division revenue is expected to remain stable [35] - The increase in tax burden is attributed to various technical issues, with the CFO unable to provide detailed explanations [36] Question: Sustainability of equity product revenue - The CFO noted strong performance in equities across regions, with expectations for some normalization in the future [39][40] Question: Investment Banking pipeline and ROE - The CFO highlighted a strong advisory pipeline in Japan and international markets, with expectations for continued strength in DCM [45] - The base ROE is gradually improving, and while discussions about raising targets are ongoing, the focus remains on maintaining at least 8% ROE [47]