Nomura (US:NMR)2025-07-29 10:32Financial Data and Key Metrics Changes - Group net revenue was JPY 523.3 billion, up 16% from the previous quarter [4] - Income before income taxes increased by 64% to JPY 160.3 billion, while net income rose by 45% to JPY 104.6 billion [4] - Earnings per share (EPS) was JPY 34.04, and annualized return on equity (ROE) was 12% [4][21] Business Line Performance Changes - Wealth Management net revenue increased by 6% to JPY 105.8 billion, with income before income taxes rising by 8% to JPY 38.8 billion [5] - Investment Management net revenue was up 18% to JPY 50.6 billion, while income before income taxes rose by 39% to JPY 21.5 billion [8] - Wholesale net revenue increased by 1% to JPY 261.1 billion, with income before income taxes rising by 12% to JPY 41.9 billion [11] Market Data and Key Metrics Changes - Total sales increased by 24% to JPY 6.7 trillion, with stock sales rising sharply due to a tender offer exceeding JPY 1 trillion [6] - Assets under management reached a record high of JPY 94.3 trillion, driven by market recovery [9] - Net inflows in the investment trust business were around JPY 280 billion, while ETFs saw outflows of approximately JPY 670 billion [10] Company Strategy and Industry Competition - The company aims to maintain a steady growth trajectory across all divisions despite geopolitical risks and market uncertainties [4][20] - The newly established banking division is expected to contribute positively to overall performance [4][15] - The company is focusing on improving capital efficiency and growth in the investment banking sector, particularly in Japan [14][22] Management's Comments on Operating Environment and Future Outlook - Management noted that client sentiment is gradually improving, with a rise in business volume related to stocks and investment trusts [22] - The company anticipates that Wealth Management will perform well due to changing market conditions [22] - Management expressed confidence in the stability of the investment banking pipeline and ongoing corporate governance improvements in Japan [51][52] Other Important Information - Group-wide expenses increased by 2% to JPY 363 billion, with compensation and benefits rising by 8% [16] - The common equity Tier 1 ratio was 13.2%, down from 14.5% in March, attributed to an increase in risk assets [19] - The company is implementing enhanced security measures in response to phishing scams affecting client accounts [23] Q&A Session Summary Question: Regarding phishing scams and compensation for losses - Management confirmed that all illegal transactions up to June have been reflected in the costs, which are included in other expenses [25][26] Question: Trends in fixed income and equity - Management acknowledged that fixed income was weak while equity was strong, with some recovery in Japan's rates products after April [28][29] Question: Situation in global markets and regional performance - Management indicated that overall performance in global markets is in line with the first quarter, with equities performing well and fixed income relatively weak [31][32] Question: Capital policy and M&A updates - Management emphasized that business strategy drives capital policy, with a focus on investment opportunities and shareholder returns [39][40] Question: ETF outflows and investment management costs - Management stated that the ETF outflow situation has stabilized by June, and the increase in investment management costs is due to higher personnel and performance-linked bonuses [46][47]