Nomura (US:NMR)2025-02-08 12:44Financial Data and Key Metrics Changes - Group-wide net revenue increased by 4% quarter-on-quarter to JPY 502 billion [4] - Income before income taxes grew by 4% to JPY 138.3 billion, while net income rose to JPY 101.4 billion, representing a 3% increase over the last quarter [4] - EPS reached JPY 33.08, and annualized return on equity was 11.8%, marking the seventh consecutive quarter of profit growth [5][6] Business Line Data and Key Metrics Changes - Wealth management net revenue was flat quarter-on-quarter at JPY 116.3 billion, with income before income taxes growing by 2% to JPY 46.2 billion [14] - Investment management net revenue decreased by 18% to JPY 45.7 billion, while income before income taxes fell by 41% to JPY 18.9 billion [24] - Wholesale net revenue increased by 10% to JPY 290.5 billion, with income before income taxes reaching JPY 62.4 billion, the highest level in four years [28][29] Market Data and Key Metrics Changes - International business accounted for nearly 40% of group-wide income before income taxes, with income before income taxes in international regions increasing by 30% over the last quarter [6] - Net inflows of recurring revenue assets exceeded JPY 1.1 trillion in the first three quarters, surpassing the full-year target of JPY 800 billion [22] - Sales of investment trusts increased by 9%, driven by demand for US growth stock investment trusts [19] Company Strategy and Development Direction - The company aims to achieve a consistent ROE of 8% to 10% or more by 2030, focusing on stable recurring profits to enhance earnings stability [39] - Strategic initiatives have led to improved profitability in international operations, with a focus on diversifying revenue sources across all divisions [5][36] - The company plans to maintain cost controls while pursuing bottom-line growth, despite inflationary pressures [81][82] Management's Comments on Operating Environment and Future Outlook - Management noted that while January started slowly compared to Q3, revenue levels remain acceptable, and they continue to aim for bottom-line growth [40] - The company expressed confidence in achieving record high net profits, emphasizing the importance of stabilizing top-line growth and diversifying revenue streams [132][133] - Management acknowledged the challenges posed by external inflationary pressures but remains committed to cost control [83] Other Important Information - The company plans to celebrate its 100th anniversary on December 25, 2025, and will pay a commemorative dividend of JPY 10 per share to shareholders of record as of March 31, 2025 [41] - The sale of the Takanawa property is expected to generate a pre-tax income of approximately JPY 56 billion [40] Q&A Session Summary Question: About wholesale fixed income business and sustainability of revenue environment - Management indicated that the securitization business was strong, with efforts to improve fund turnover and diversify the portfolio [49][50] Question: Regarding asset efficiency and future sales of assets - Management confirmed that they are proactively selling policy holdings and do not expect to change the ratio of holdings significantly [52][121] Question: Shareholder return and dividend policy - Management clarified that the commemorative dividend is separate from regular dividends, and they will monitor proceeds from asset sales for potential shareholder returns [65][66] Question: Impact of client visit rules on sales - Management noted minimal impact on existing client relationships but acknowledged a slight slowdown in new customer acquisition [78] Question: Investment management pipeline and revenue forecast - Management expressed confidence in a strong M&A and ECM pipeline, with expectations for continued high performance in investment banking [95]