TOKYO: Nomura Triples Q1 Profit as Deflation Ends, Nomura Holdings, Japan’s leading brokerage and investment bank, announced a 195 percent surge in first-quarter profit on Tuesday (July 30). The significant increase was driven by a strong global market rally and the resurgence of domestic inflation, which fueled higher demand for its wealth management services.
The results highlight Nomura’s successful transition to a fees-based profit model, aimed at achieving more stable revenue that is less vulnerable to market fluctuations.
Nomura said net profit in the April-June period was ¥68.9 billion (US$446 million) versus ¥23.3 billion a year earlier.
The end of deflation in Japan has encouraged retail clients to move into investment products, Nomura’s chief financial officer Takumi Kitamura told a media briefing.
“The major update to our business structure since last spring and the shift in our customers’ mindset from savings to investment has meant we were able to achieve strong results,” Kitamura said.
Alongside this, the global market rally led to improved client sentiment and higher sales of US and global stock funds, Nomura said.
The wealth management business is growing steadily as people increasingly shift more of their savings to investment, Chief Financial Officer Takumi Kitamura said at a news briefing in Tokyo. Still, he said more needed to be done to address a stubbornly high cost ratio in the wholesale division that houses trading and investment banking operations.
“The domestic retail business did very well indeed,” said Michael Makdad, an analyst at Morningstar in Singapore. “On the other hand, the wholesale business continues to be a bit lackluster, with the expense ratio still high.”
Investment banking revenue rose 22% from a year earlier, growing for the fifth consecutive quarter. Advisory business had a strong quarter in Japan but slowed abroad, the firm said.
