Nomura Q4 2025 Earnings Call Transcript

Quartr
Provided by Quartr
April 25, 2025
Skip to Participants
Operator

Good day, everyone, and welcome to today's Nomura Holdings Fourth Quarter and Full Year Operating Results for Fiscal Year Ending March 2025 Conference Call. Please be reminded that today's conference call is being recorded at the request of the hosting company. Should you have any objections, you may disconnect at this point in time. During the presentation, all the telephone lines are placed for listen only mode. The question and answer session will be held after the presentation.

Operator

Please note that this telephone conference contains certain forward looking statement and other projected result, which involve known and unknown risks, delays, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievement of the company to be materially different from the result, performance or other expectations implied by those projections. Such factors include economic and market conditions, political events and the investor sentiment, liquidity of secondary market, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size number and timing of transactions. With that, we would like to begin the conference. Mr. Takume Kitamura, Chief Financial Officer, Please go ahead.

Moderator

Good evening. This is Kitamura, CFO of Nomura Holdings. I will now give you an overview of our financial results for the fourth quarter and full year of fiscal year ended March 2025. Please turn to Page two. First of all, our full year results.

Moderator

As you can see on the bottom left, group net revenue increased 21% year on year to JPY 1,008 and 92,500,000,000.0, while income before income taxes grew 72% to $472,000,000,000. Net income increased to 2.1 times the year earlier level to a record high JPY 3 and 40,700,000,000.0. Earnings per share came to JPY 111.03 and return on equity was 10% making a strong performance. As shown on the bottom right, all three main segments performed solidly and three segment income before income taxes grew by 80 to JPY 4 and 26,600,000,000.0. I think it is important to highlight that earnings clearly show the fruits of our medium to long term initiatives.

Moderator

Wealth management recurring revenue grew by 30% on a continued net inflow into recurring revenue assets via the provision of comprehensive asset management services coupled with growth in client assets, thanks to an upturn in market conditions. Investment management saw a 20% increase in business revenue, thanks to a high level of assets under management, which reflected an eighth consecutive quarter of net inflows. Both divisions saw steady growth in stable revenues. Meanwhile, revenues grew in all business lines and all regions, thanks to the diversification of revenues, particularly overseas. Income before income taxes rose sharply on the back of revenue growth across all divisions as well as thoroughgoing cost controls.

Moderator

As a result, income before income taxes reached an eleven year high in wealth management, a fifteen year high in wholesale and the highest level at the Investment Management division since it was established in April 2021. Turning to Page three, as you can see on the left hand side, all divisions achieved income before income taxes targets for the fiscal year ended March 25 presented at May 23 Investor Day. Profitability also improved sharply in the three international regions as you can see on the right hand side. Their combined income before income taxes came to JPY137 billion, marking the highest level since we first disclosed geographic information in the year ended March 2003. Our group wide effective tax rate also fell to 26% as some international entities made use of tax losses carried forward.

Moderator

Please turn back to Page two again. In view of our strong performance for the period ended March 2025, we expect to pay an ordinary dividend of JPY 24 per share in addition to the one hundredth anniversary commemorative dividend of 10 per share we previously announced making a total year end dividend of 34. This works out as an annual dividend of JPY 57 per share and a payout ratio of 49%. Today, we resolved to set up a share buyback program in order to raise capital efficiently and ensure a flexible capital management policy and to deliver shares on exercise of stock based compensation. The program will run from May 15 to December 30 and have an upper limit of 100,000,000 shares with the upper limit of the aggregate amount of repurchase price being 60,000,000,000 yen Next, let me give you an overview of our fourth quarter results.

Moderator

Please turn to Page four. All the percentage figures I mentioned from now on are quarter on quarter comparisons. First of all, group net revenue fell 10% to hundred 52,700,000,000.0 yen income before income taxes fell 29% to 97,700,000,000.0 yen and net income was down 29% as billion. Earnings per share came to JPY23.39 compared with the previous quarter when performance was robust, conditions were more difficult amid rise in yen rates and a decline in the stock market. However, we achieved annualized ROE of 8.2% exceeding the fourth consecutive quarter, the lower bond of our ROE target of 8% to 10% or more by 02/1930.

Moderator

As you can see on the bottom right, three segment income before income taxes totaled billion. Amid uncertain market conditions, the quarter saw a decline in flow revenue in wealth management and lower fixed income revenues in wholesale, but stable revenues, specifically recurring revenue and business revenue increased further and equities and investment banking both achieved strong results. Next, please turn to Page seven and I will present an overview of each business in the fourth quarter. In wealth management, net revenue fell 10% to 104,500,000,000.0 yen and income before income taxes fell 20% to 37,000,000,000 yen We generated record high stable recurring revenue of 51,600,000,000.0 yen on a boost from investment advisory fees booked half yearly and also achieved cost savings of 4%. As a result of which, our recurring revenue cost coverage ratio for the quarter rose sharply to 76%.

Moderator

Flow revenue etcetera fed 20% to 52,900,000,000.0, owing to a 45 decline in primary stock subscriptions and slowdown in secondary stock transitions transactions and investment trust purchases amid an uncertain market outlook. Quarterly earnings tend to fluctuate owing to prevailing market conditions at a given time, but on a full year basis, you can see that the division achieved revenue growth of 12% or around JPY49 billion in value terms while keeping cost increases down to a modest JPY1 billion. This can be seen as the fruits of our ongoing effort to reduce costs. As a result, leverage enabled us to achieve growth of 39% in income before income taxes. Please turn to Page eight for an update on total sales by product.

Moderator

Total sales rose 3% quarter on quarter to 5,400,000,000,000.0. Sales of stock rose 6% to 3,900,000,000,000.0 in part owing to a large lot purchase. Sales of bonds increased 16% with a contribution from Toyota Motor Credit Corporation's primary deal. Secondary sales of stocks excluding the large lots purchase and sales of investment trust fell as investors stayed on the sidelines amid range bound trading in equity markets and an uncertain outlook. Next on Page nine, we look at progress in KPIs.

Moderator

In wealth management priority was given to four KPIs in the fiscal year, net inflows of recurring revenue assets, recurring revenue assets, flow business clients and workplace services. As you can see, targets were attained in all four KPIs. In particular, net inflows of recurring revenue as it's seen on the top left came to 374,000,000.000, sharply exceeding the target of billion and contributing to growth in recurring revenue. On the bottom right, we see that 3,880,000 units of workplace services were provided and efforts to broaden the client base centered on ESOP related services have begun have been going well. Please turn to Page 10 for Investment Management.

Moderator

Net revenue was down 6% to JPY43 billion, while income before income taxes fell 18% to JPY15.5 billion. Net revenue fell owing to investment gainloss. Private equity investment firm Nomura Capital Partners recognized unrealized valuation gains as the value of portfolio companies appreciated, but investment valuation gains and losses related to American Century Investments turned slightly downwards. Business revenue, which is a stable type of revenue came to billion, a record high for the fifth straight quarter. Assets under management were down at in March owing to market factors, while asset management fees were little changed from the strong previous quarter.

Moderator

Revenue rose in the aircraft leasing business. Please turn to Page 11 for an update on the asset management business, which is a key source of business revenue. As seen on the top left assets under management at the March were JPY89.3 trillion, exceeding the KPI target of 89,000,000,000,000 for the fiscal year ended March 25. On the bottom left, net inflows came to 14,000,000,000, marking the eighth straight quarter of net inflows. Investment business investment trust business accounted for about $270,000,000,000 of inflows.

Moderator

There were outflows of $420,000,000,000 from MRFs hinting at prominent shifts of fund to new investments while ETFs saw inflows of around $670,000,000,000 into Japanese stocks, mainly at the time of the market downturn in March and there were inflows into investment trusts, including Japan's First publicly placed investment trust investing in private infrastructure company stocks as well as balance funds. On the lower right, we see that alternative assets under management came to a record high 2,600,000,000,000.0 yen appreciation had an adverse effect, but there were about 170,000,000,000 yen in net inflows owing to inflows to the investment trusts we mentioned earlier that invest in private infrastructure company stocks and additional investments by institutional investors in response to capital calls.

Moderator

Next we please look at Page 12 for wholesale performance. Wholesale net revenue fell 11% to billion and income before income taxes declined 40% to JPY37.5 billion. Equities revenues rose to for the fifth straight quarter and investment banking revenues increased on contributions from EMEA. Fixed income revenues slowed relative to the previous quarter when they were strong. On the top left, the cost to income ratio was 84% and the ratio of revenue to modified RWA was 7.6% for the full year beating the fiscal year KPI targets of 86 and at least 6% respectively.

Moderator

Net revenue rose 22% and growth in expenses was held to 10% producing income before income taxes of 3.1 times the previous year's level. Please turn to Page 13 for an update on each business line. First, global markets net revenue declined 13% to JPY206.9 billion. Fixed income net revenue fell 24% to JPY105.8 billion, partly in response to a strong performance through the previous quarter. Rates revenue fell as client activities slowed in the latter half of the quarter, credit revenues were unfavorable owing to spread widening.

Moderator

On the other hand, FX, EM and securitized products revenues were down from the previous quarter when revenues were strong, but remained firm. Equities net revenue rose for the fifth straight quarter to JPY101.1 billion. Revenues were particularly strong in The Americas and the derivatives revenues rose sharply on the backdrop of high volatility and increased client activity. Execution services revenue were up, thanks to increased volume. Next page 14 for Investment Banking.

Moderator

Net revenue was JPY52.3 billion, the highest quarterly net revenue on record going back to the fiscal year ended March 2017, which is the span over which comparisons are possible. Advisory revenues were strong in the fourth quarter with several large scale cross border and tender offer deals executed in Japan as shown on the top right. Overseas deals related to renewables and the beverages mainly in EMEA contributed to revenues. Advisory revenues accounted for half of investment banking net revenue. Revenues in financing and solution fell from the previous quarter when the ECM deals were strong in Japan, but we executed several deals in the fourth quarter, including a global PO for Japan Postbank and SSA bonds, including Spanish government bonds.

Moderator

Next Page 15 for non interest expenses, group wide expenses amounted to JPY $355,000,000,000, down 2% compensation and benefits declined 10% to JPY 172,300,000,000.0, mainly owing to a decline in bonus provisions linked to the top line. Please turn to Page 16 for an update on our financial position. As shown on the bottom left, the Tier one capital ratio was 16.2% and the common equity Tier one ratio was 14.5% at the March, both down about two percentage points from the December. This reflects the start of the implementation of new capital requirements from the March as part of the Basel III finalization. We aim to maintain the common equity Tier one ratio at 11% or higher over the medium term and thus should be able to comfortably meet capital requirements even after the new rules are implemented.

Moderator

This concludes our overview of our first fourth quarter results. To sum up, in May, we issued our Management Vision 02/1930 titled Reaching for Sustainable Growth. The numerical targets set forth in that vision included include consistently achieving ROE of 8% to 10% or generating more than 500,000,000,000 yen income before income taxes. In the year since we presented that management division, we have made tremendous progress in building up our franchise capable of delivering sustainable growth for Nomura Group. It is worth highlighting the steps we have taken to achieve sustainable growth of sustainable revenue.

Moderator

As discussed earlier, recurring revenue in wealth management and business revenue in investment management have risen to record levels. And just this week, we reached an agreement to acquire the Macquarie S. And Europe European public asset management business. This acquisition makes investment management larger in size and also more global setting up a major step change in the divisions growth.

Moderator

Also just this month, we established a new banking division that will leverage the strength of our banking and the trust banking functions so that we can provide our clients with more diverse, high quality services in taking on these initiatives in Japan and globally. Our aim is to put Nomura Group more solidly on the path to city growth. Our management team attaches great importance to capital efficiency. Basel III finalization took effect at the March and our common equity Tier one capital ratio is comfortably higher than the target we have set for ourselves of 11% over the medium term. The decision regarding today's share buyback was made after considering both the current capital levels and the prevailing stock price levels.

Moderator

Going forward, we intend to use our surplus capital to invest in strategically selected growth areas while also rewarding our shareholders. The market environment has been turbulent and uncertain ever since the Trump administration revealed its reciprocal tariff policy, but it is precisely at times like these Nomura that Nomura Group has an especially by the role to play in April thus far. Wealth management has seen a slowdown in net revenue as clients have retreated to the sidelines. But during the three day period of consecutive steep declines in the stock market, the division as a whole saw more buying than selling with some investors choosing to buy on the correction. Our sales partners provided to our clients with timely and appropriate information that helped limit the extent of overdone selling among our client base and recurring revenue assets in private wealth management and wealth management domains have continued seeing net inflows in wholesale, the upsurge in market volatility has been accompanied by robust trading activity in equities and FX emerging markets.

Moderator

Net revenue in division is currently on track to be higher than in the fourth quarter of the fiscal year just ended. I believe Nomura Group's talented and abundant human resources, robustly healthy financial position and powerful global reach will manifest our strength, especially in times of uncertain like now. As we celebrate our one hundredth anniversary, we will continue to strive for further growth and we appreciate your continued support.

Moderator

The first question is by SMBC Nikko Securities, Muraki san. SMBC Nikko Securities, Muraki speaking. I have two questions. First of all, global markets. Page 13, fixed income year on year in comparison to U.

Moderator

S. Peers, it seems weak. Equities seems to be at the right level, but I think that there's some weakness in fixed income. January, February, March, how was your business and what's the latest situation this month in April? Can you elaborate especially focusing on comparison with your peers?

Moderator

My second question, Page 16, capital policy. Ball three finalization 14.5% and from here onwards acquisition of asset management about 1.5% drop and share buyback 0.3% or slightly lower according to your plan. So 12.8% would probably be your target, is my guess correct? And you will probably be showing your target next month in Investor Day, but target range was probably in your mind as you thought about CET1 13% in deciding the share buyback program. Is that the correct assumption?

Moderator

This is Kitamura speaking. Thank you, Murakishan for your question. Fixed income, it appears to be weak and that's our view as well. First of all, product mix is a bit different. When we look at the scripts of competitors, we see comments saying that they were healthy in commodity.

Moderator

But as we have been saying, we don't have that business at all. So that's a factor that makes the difference, but we have no intention whatsoever to launch commodities business. So this is an area where we don't have any option and macro seems to be a bit weak. And in rates, structure rates, agency mortgage, the percentage of these products are high. Flow rates, it was good, but other rates, mortgage didn't do so well.

Moderator

And region mix wise, Japan, in comparison to our competitors, the share or proportion is high. And as you are well aware, JGB was rising in Japan and therefore challenging environment continued. So against this backdrop, unfortunately, in comparison to our peers, our performance may seem to have been weak. Regarding monthly performance, January '40 percent, February slightly less than 40% and March slightly over 20%. Especially, we saw the drop of revenues in March as I have introduced, but there's mixed fees regarding a possible rate hike and the domestic investors were on the sidelines and thus less liquidity.

Moderator

So those are some of the reasons behind. And as far as April is concerned, generally speaking, the average of Q4 is about the level we are observing for this month. And on your second question, set one target. This time We made a decision on share buyback program. We of course took a look at various indicators.

Moderator

And when we do analyst meetings, we usually talk about CET1, but you're the expert, I don't intend to preach, but Basel regulation is not just about CET1, there's tier one, there's capital adequacy and equity ratio. So we take a look at each of these indicators in order to decide the amount of share buyback. And if you look at the capital structure of Nomura, much of it is CET1. So we took that into consideration and decided on the figure of 60,000,000,000. It's not necessarily the case that we've set the target at slightly lower than 13%.

Moderator

On the Investor Day, we will announce the target range. So if you could wait for some time to come. Thank you very much. On the first point, I will deviate from this performance announcement, capital that used to be concentrated in The U. S.

Moderator

Is transferring to Europe. You are doing well in U. S, but you are facing difficulty in Europe. But trading included, are you beginning to see changes in that trend or it's premature to probably decide on change of resource allocation, but what do you think about trading resource allocation, regional divide? Have you begun debate on this issue?

Moderator

This is Kitamura speaking. ECB rate reduction is so there was tailwind for Europe. But in principle, so far it's not as significant as to change our resource allocation. But if this trend continues for longer than expected and maybe we will not be able to avoid having to make such a decision. Well understood.

Moderator

Thank you very much.

Moderator

Next question comes from Watanabe san from Daiwa Securities. Thank you. I am Watanabe from Daiwa. I have two questions. First question is about capital policy buyback of 60,000,000,000 yen What's the rationale for that amount?

Moderator

And as part of that, RSU portion is how much? And three months ago, commemorative dividend separate from usual dividend was talked about, but 10% of or more than 30,000,000,000 yen is it pure buyback? And regarding the reshuffling of the business portfolio sale of Takanawa and also Macquarie Asset Management acquisition. So you are reshuffling the portfolio, but in our stock and the group stock, is there a plan to make a revision to the holdings? Thank you very much.

Moderator

Why JPY 60,000,000,000 the rationale behind the number is your question? The rationale is, as I mentioned in my answer to Mr. Muraki, We looked at the various ratios and we came to JPY 60,000,000,000. And in the JPY 60,000,000,000, naturally RSU portion is included. So even if we deduct that portion more than 50%, our committed total return ratio is satisfied.

Moderator

Does that answer your question? And your second question, various changes to portfolio includes our sale of Takano trading center and as we announced this week, acquisition of Macquarie business. So dynamically, there has been changes to our portfolio. Regarding NRI, at this point, we do not have a plan of making changes to our holding of stake in NRI and there are other assets that we have to pay attention to. Thank you very much.

Moderator

Regarding the first question, just to confirm, RSU portion 60 that's included in the 60,000,000,000 yen then total return ratio of 50%. Then 34,000,000,000 yen needs to be paid out for the buyback. Then that means that 26,000,000,000 yen or less, that's the portion for RSU. Is it the right understanding? I leave you to speculate, but you are not far off from the mark.

Moderator

Then JPY 49,000,000,000 or so, but there is a tax and other factors, then maybe that will be the size of contribution. As said repeatedly, excluding commemorative dividends, so there's regular dividend and also the buyback. So we are exceeding 50% with those. Okay. Thank you very much.

Moderator

I understood.

Moderator

The next question is by Tsushino san of BofA Securities. Thank you for taking my questions. I have three granular questions. First of all, IT in the three months of Q4, IT expenditure went up. Is this one time off phenomenon or will this be the general level going forward?

Moderator

Second, M and A fee, in Q4, it was rather high, again increased and rather high. Last year, there was a big transaction, but recently it had been calm. So can we expect that this number will begin to come down? And thirdly, March investment trust sales was weak. What was the reason for this lack of performance?

Moderator

And one more point of confirmation, you said are you talking about FIG or is equity included for April? You said April has been at the average of 4Q. Is that the total for the global market? That's all for me. This is the CFO speaking.

Moderator

Three questions. First of all, IT expenses, many combinations have been included and there were some fiscal year end factors included and half of the third quarter had been injected into Q4 bookings. So will this level continue? No, we don't think so. I hope I answered the first question.

Moderator

And your second question? M and A. As you know, corporate governance, we're trying to strengthen corporate governance and Japanese companies continue to be quite aggressive in their M and A strategies. That is our recognition. But partly due to the Trump tariff policies, most recently, I think we need to be cautious and we will be monitoring the situation closely.

Moderator

And as I said in my presentation, the FX rate JPY143 to the dollar is probably the current level. It went down to 160 yen to the dollar. So for Japanese businesses, there could be positive factors from such perspective. And also shifting production to The U. S, invest more in The U.

Moderator

S. Market. Those are some of the things that the businesses are talking about. So corporate governance strengthening is irreversible. Will there be some deals in the pipeline immediately?

Moderator

We have to stay calm and observe. And the pipeline overseas is not so bad, but again, stock price and market trend seems to be uncertain. So how will the tariff policy end? What will be the endpoint? We've heard that investors are taking a wait and see attitude and March Investment Trust sales was poor.

Moderator

First of all, in February, major private infrastructure fund deal took place. So new investment trusts have not been launched and there's very little visibility in the market. Amidst such situation, investors are remaining on the sidelines. But all the more so because we're in difficult times, I think the partnership should be leveraged. And also because of this environment rather than trying to sell something to our clients.

Moderator

I think it's time to listen to the challenges that our clients are facing. So you may feel that the numbers are rather poor, but we are not pessimistic at all. And on your final point, April.

Moderator

Well,

Moderator

Q4 April has been following the pattern of Q4 slightly weakened fixed income while equity did well and that trend remained unchanged. And I think that's the general trend in the GM as a whole. Thank you very much.

Moderator

The next question comes from Sato san of JPMorgan Securities. Thank you. I'm Sato from JPMorgan Securities. I have two questions. First question, in April, the market had a high volatility and impact on flow was explained in many ways.

Moderator

But for example, what about the risk of certain loss counterparty or loan position related loss? What about the risk of such loss? And what is the impact on risk asset? What is your view on those matters? Not my hope is that you would comment that you are not expecting anything significant in impact.

Moderator

Second point is regarding cost income ratio of wholesale. How do you evaluate that throughout the year? You explained your evaluation. But looking back on the movement over the last several quarters in good way or about the top line progress has had impact on the costincome ratio. Moving forward, at the level of if the top line is at the level of the fourth quarter, then would it be possible to achieve 80% of cost income ratio?

Moderator

So especially in the second, third and fourth quarters, looking at the progress of cost income ratios and what is your evaluation? And also, could you comment on your future outlook? Thank you. Thank you, Sato san for your questions. Since March or so, market we've been looking at the market trend and we have been taking quite risk off positions.

Moderator

We have been tightly managing risks. From here, credit spread is widening, so that calls for our caution. Recently, do not feel impact that have major impact on our positions, but we will be we will have to pay close attention to the progress from here. It's not just us, but this entire finance industry will have to pay close attention. But as mentioned earlier, we are being quite cautious.

Moderator

So we do not have cause for concern at this point in time. Regarding the cost income ratio, in the third quarter, it was down to 79%, then it went to 86%. So as you pointed out, there's still room for us to control cost income ratio, especially this time, costincome ratio looks high. That's because Equities execution made a progress, revenue grew, but this business involves high costs. So cost ratio went up.

Moderator

But other than that, looking at the market data in other areas, we believe there is room for lowering the cost ratio and now various initiatives are underway and it will take some more time for such initiatives to start taking effect on financial statements. In wealth management, we took some measures and we see the effect in the P and L. But regarding the initiatives in the wholesale division, we are working on various transformation initiatives and it will take some time before we start to see the effect. Thank you. I understood.

Moderator

Thank you.

Moderator

Citigroup Securities, Niwa san, please go ahead. This is Niwa of Citi speaking. I have two questions. Value at risk and risk asset and the use. First, this was already replied to, there's overlap at Page 19.

Moderator

March numbers were quite low. So you said you were already in risk off mode, but was this as a result of intentional control or was it due to the market? What was the judgment that led to this operation? The direction seems to be rather different from your competitors. So if there's something that we need to keep in mind, please let us know.

Moderator

That's my first point. Secondly, this fiscal year and the future accounting years and the use of risk asset is the subject of my question. Already, you've announced the acquisition of asset management business and brokerage strengthening was in some press reports. I thought that you used to do business within each division, but are you more aggressive in using risk assets and including the pipeline, can you give us more color and detail? Is Kitamura speaking.

Moderator

Thank you, Niwa san. The first point VAR, we announced a full year result and we looked at the market. We had to announce the full year result and we were rather subdued. What about the situation at our competitors? We haven't been monitoring so closely.

Moderator

For them, it was Q1. So they must have been more aggressive, but that's only my imagination. But we took into consideration the recent market situation and controlled quite stringently our business activities. The second question is use of risk weighted asset and cash PV was touched upon, but that's only in the press reports. There's nothing that has been decided within our company and it's not just cash PV, but we're always debating on various options and nothing has been decided and that's a true fact.

Moderator

And the recent news was acquisition, which we announced earlier this week. And most recently, we have been spending much time debating on that deal. Business wise, in wholesale, we've already introduced a self funding concept and within wholesale, if they are to do new business, they would do that by switching the portfolio. On the other hand, the most recent announcement regarding the acquisition of the asset management business, It's about public. It's a public company and some of the people gave us comments saying that I thought you'd be acquiring private business.

Moderator

But by having a strong franchise, we could do bolt on M and A to lay over some private business on top of this platform that could be a possibility. So we're not saying we won't be using risk assets to a certain extent we will be using risk assets. So, if we discover such opportunity in the future, we will be using risk assets. Thank you very much. Well understood.

Moderator

Thank you.

Moderator

The next person asking the question is san from SBI Securities. Thank you. Can you hear me? I am Otsuka from SBI Securities. Yes.

Moderator

I have two questions. Page seven. First question is about wealth management. The flow revenue, I have question about flow revenue and so on. Looking at the most recent numbers, what based upon the situation in April, what is the level of flow revenue?

Moderator

Is it at the same level as the fourth quarter when you look at April? Or is there going to be some slowdown, even a qualitative explanation helps? That's my first question. Thank you very much. Regarding wealth management, now I do not have numbers here, but looking at the quarter, in the third quarter, third quarter was the toughest quarter for us.

Moderator

And in April, the situation is not as severe as in March, but it's to the fourth quarter where there is a decline in market customers, our clients are buying, but after that there is some swing or fluctuation. So overall activities have slowed down somewhat, but we are increasing that time to have dialogue with clients and in a market condition like this, it is a good opportunity for us to listen to what customers have to say about their concerns and customers have more and more concerns. So regarding their portfolio by supporting customers with their portfolio, then even though we see slowness right now by spending enough time with customers, eventually our efforts will pay off later. Thank you. Next question, Page two is about Page 10, Investment Management Division.

Moderator

The other day, you made announcements about Macquarie acquisition, but after the acquisition, as new initiative, not investment, but are you going to focus on business revenue? Yes. And another question, okay? Okay, thank you very much. Another question regarding American Century, in the fourth quarter, there was weakness, but and recently investment gain loss, American Century, can we assume American Century continued to struggle?

Moderator

So your question, so the ACI indeed, there is impact of market and there is volatility for us in order to mitigate volatility, we have hedge in place. So in the fourth quarter, our hedge took effect. So even if ACI performance goes up or down, we have hedge to mitigate the impact either way. So ACI evaluation, what is going to be the trend or end result in the first quarter, we cannot tell at this point, but what we aim to achieve is to hold down or suppress volatility. Understood.

Moderator

Then it's a rough question, but compared to before, your hedge position, you have more hedge position than before. So investment gain loss impact, which used to be big in some quarters, but you won't be able to you will not be able to recognize such outsized loss as in the past. Regarding the ACI evaluation, some market are suppressed with hedging. So in that sense, volatility will be less than before. On the other hand, within ACI, there is some parameter that could move that cannot be hedge above.

Moderator

For example, last year, so there were some fluctuations regarding ACI that's because of the internal factors. So volatility, we cannot guarantee that volatility comes to zero completely. Okay. My understanding has been clarified. Thank you.

Moderator

The next question is by Bloomberg Intelligence, Baonsang. I have two simple questions. Wealth management, according to your presentation, net increase of against the 80,000,000,000 KPI In comparison to the first half of the quarter, in the second half there was market movement that you said that 4Q was difficult, but Q3 was the bottom in terms of acquired assets. So my point is, in the second half of the year that ended versus the recent trend in market, a chaos stock asset trend 80,000,000,000 KPI. Have you entered into a stage that you are able to elevate the KPI further?

Moderator

From the run rate was last year's performance rather strong? It's rather abstract, but that's my question. And the second question is regarding details. Billion dollars buyback, CET1 ratio, you said that that was in your mind, equity ratio. You already announced the Takanawa Training Center sales proceeds from that asset sales.

Moderator

If that's not included in shareholder return, for next fiscal year that would be included in shareholder return. So that will be a repetition, but if you have some comments regarding that point as well, I'd appreciate. Thank you. This is Kitamura speaking. Regarding the increase in stock asset, first quarter and second quarter of last year, it was strong and in a way it was more than expected.

Moderator

But what we want you to focus is a red portion, which includes corporates. And there's quite big volatility in the gray zone is the stock asset net gain and loss. And you see that the level has been high and true that Q3 was low, but Q4 was at a high level. Was Q3 the bottom? It's difficult to say, but if we look at the plunge in the market most recently, wealth management, which is our core and PWM in these areas by outperformed sales and recurring asset increased on net basis.

Moderator

So we see robustness and I think we've been doing well in terms of our conversation with our customers and outside of WM and PWM affluent class through digital means we are providing services. So we are trying to achieve net gain and the wealth management division is making all our efforts to do that this fiscal year as well. Yen 60,000,000,000 Takanawa proceeds. Takanawa proceeds is recognized in Q1 and when we decided the shareholder return for last fiscal year, which was announced today, was not included, Takanau was not included. Thank you very much for answering my questions.

Moderator

We would like to conclude question and answer session. If you have some more questions, please ask our Nomura Holdings IR department. In the end, we'd like to make closing address by Nomura Holdings.

Moderator

Thank you for attending. As I said at the beginning, our initiatives are finally materializing us numbers and on a full year basis, it was a strong performance. Profit was at record high. And for four quarters in a row 8% target was exceeded. That shows the stability of our performance.

Moderator

Since April, we have established a banking division and we have announced the acquisition of Macquarie assets and we are implementing various initiatives. So in order to stabilize business, are doing what we can everything we can do. On the other hand, market environment is quite severe and challenging. So I received a question about wholesale, but cost control and the business process transformation still is only halfway at its halfway point. So just because the performance are strong this time, we would continue working on our initiatives.

Moderator

And by delivering the strong results continuously, hopefully, you are view toward us will improve and market evaluation of us will improve. So continuously, we will make company wide efforts and thank you very much for your continued support. Thank you.

Moderator

Thank you for taking your time. And that concludes today's conference call. You may now disconnect your lines.

Analysts
    • Moderator
Powered by Quartr

Key Takeaways

  • Full-year FY2025 results: Group net revenue rose 21% to JPY1.0 trillion and net income more than doubled to a record JPY340.7 billion, delivering a 10% ROE.
  • Record segment profits: Wealth management recurring revenue grew 30%, investment management business revenue increased 20%, and all three main divisions hit multi-year highs on diversified revenues and strict cost controls.
  • Q4 performance: Net revenue fell 10% QoQ to JPY152.7 billion and income before taxes dropped 29% amid market headwinds, yet the annualized ROE of 8.2% still exceeded the 8–10% target range.
  • Capital return policy: The board declared a year-end dividend of JPY34 per share (JPY57 for the full year) with a 49% payout ratio, and launched a share buyback program of up to 100 million shares (JPY60 billion).
  • Strategic growth initiatives: Nomura agreed to acquire Macquarie’s European public asset management business and established a new banking division to expand its global wealth and banking services platform.
A.I. generated. May contain errors.
Earnings Conference Call
Nomura Q4 2025
00:00 / 00:00

Transcript Sections