Nomura (NMR) - 2026 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Return on equity was 10.3%, meeting the 2030 target of 8%-10% for the seventh consecutive quarter [3] - Group-wide net revenue reached JPY 551.8 billion, a 7% increase from the previous quarter [3] - Income before income taxes decreased by 1% to JPY 135.2 billion, while net income also fell by 1% to JPY 91.6 billion [3] - Earnings per share for the quarter were JPY 30.19 [3] Business Line Data and Key Metrics Changes - Wealth Management saw a growth of approximately 30% compared to the previous quarter, with net revenue increasing by 14% to JPY 132.5 billion [4][8] - Investment Management's business revenue reached an all-time high, but profits fell due to weaker investment gains and one-time expenses related to the Macquarie acquisition [4][12] - Wholesale net revenue rose by 12% to JPY 313.9 billion, with investment banking net revenue increasing by 31% to JPY 57.1 billion [15][17] Market Data and Key Metrics Changes - Recurring revenue assets saw a net inflow of JPY 503.9 billion, reaching an all-time high of JPY 28.1 trillion by the end of December [10][11] - The number of flow business clients increased by around 270,000 to 1.53 million, driven by buoyant market conditions [11] Company Strategy and Development Direction - The company announced a share buyback program with a limit of 100 million shares and JPY 60 billion in amount, aimed at enhancing shareholder return and capital efficiency [5] - The company is focused on maximizing synergies between existing and newly acquired businesses, particularly in the Investment Management division [26] Management's Comments on Operating Environment and Future Outlook - Management noted that client sentiment remains favorable despite some selling pressures in the market, with a shift from savings to investment being a sustainable trend [21][22] - The company expects a solid pipeline in investment banking, despite a slower start in Q4 due to seasonal factors [22] Other Important Information - Group-wide expenses increased by 10% to JPY 416.5 billion, driven by one-time costs associated with acquisitions and strategic investments [19] - The common equity Tier 1 ratio at the end of December was 12.8%, with a slight decrease attributed to changes in regulatory capital calculations following the Macquarie acquisition [20] Q&A Session Summary Question: Regarding Laser Digital's losses and position management - Management acknowledged the losses due to market fluctuations and emphasized the importance of precise position management to control volatility [31] Question: Sustainability of Wealth Management's net inflow - Management refrained from making definitive comments on sustainability but noted a significant shift in retail investor behavior towards investment [32] Question: Wealth Management pricing strategy - Management declined to comment on internal discussions regarding commission rate increases, focusing instead on value provision to customers [38] Question: Timing and scale of buyback - Management explained that the timing was influenced by the recent acquisition and the need to meet investor expectations [39] Question: Impact of personnel costs and deferred compensation - Management provided details on the expected impact of accounting changes on personnel costs, estimating around JPY 8 billion for Q4 [52] Question: Long-term strategy for Laser Digital - Management discussed the need for a thorough strategy to manage the growth and volatility of the digital asset business while ensuring diverse activities [54]