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Message from the CEO

We continue to transform as we aim for
sustainable growth based on our philosophy of placing our clients at the heart of everything we do. Koji Nagai Group CEO

We continue to transform as we aim for sustainable growth based on our philosophy of "placing our clients at the heart of everything we do."

Review of FY2014/15

Each of our businesses had a solid year in FY2014/15.

Retail made progress in transforming its business model. Retail client assets, one of our key performance indicators, grew to ¥109.5 trillion, beating our target of ¥100 trillion one year ahead of schedule.

Asset Management enhanced its investment management expertise and reported ongoing inflows both in Japan and overseas with assets under management reaching a record high.

Amid challenging market conditions, our Wholesale business saw improved profitability and franchise growth. High-profile mandates in Investment Banking and robust performance in Global Markets in AEJ drove overall performance.

As a result of this momentum, we reported stronger revenues and income year on year, with net income of ¥224.8 billion at the highest level in nine years. Earnings per share (EPS)* was ¥60, above our FY2015/16 target of ¥50 set in 2012 for the second straight year.

  • Net income per share

Long-Term Management Vision

In August 2014, we announced a long-term management vision for 2020 in order to respond to the evolving market conditions and changing client needs while aiming for further sustained growth. We raised our EPS target from ¥50 to ¥100 and aim to achieve that level consistently. The initiatives underpinning this vision will pave the way to establishing a solid position as Asia's global investment bank.

As part of our long-term management vision, we announced a new slogan Vision C&C to express how we see the current changing environment as a chance to change ourselves and continue to grow.

Addressing Challenges

We face two main challenges on the road to achieving our long-term management vision.

The first challenge is to transform our business model in Japan. Economic conditions aimed at overcoming deflation are currently taking hold in Japan thanks to Abenomics. We expect this positive momentum to continue at least until 2020 when the Tokyo Olympic and Paralympic Games are held. Historically, when economies shift from deflation to inflation, there is often an associated shift by investors away from savings and into investments. Japan has over ¥1,700 trillion in personal financial assets, the majority of which are held by senior citizens over 65. We expect these assets to start being transferred to the next generation in various forms, including as real assets such as real estate.

This trend from savings to investment combined with the significant needs around inheritance, and retail investors in Japan are becoming increasingly interested in managing their assets.

To meet the needs of these investors, we are stepping up our consulting services tailored to the specific requirements of each client. In April this year, The Nomura Trust and Banking started offering inheritancerelated services, and we established Nomura Institute of Estate Planning. These are just some of the steps we are taking to build up our platform for the estate planning business. We aim to expand this business by fully leveraging our new platform and taking a consultingbased sales approach to meet our clients' needs.
The second challenge we face is further improving the profitability of our international business. International clients are increasingly looking to Nomura as some of our peers are reviewing their business models in light of new financial regulations around the world. In response, we will focus on boosting the profitability of our international franchise. To do so, we will leverage our global network and invest resources in products where we have a competitive advantage to deliver highvalue-added services to our clients while also managing costs stringently. In EMEA, we are continuing to deepen our client franchise while controlling costs. In the Americas, the world's largest fee pool, we will look at how to expand our current footprint. AEJ offers medium- to long-term economic growth. We are laying the foundation to tap into this growth by planting the seeds for our Retail and Wholesale integrated business model through alliances and other measures with local financial institutions.

Diverse Talent

Our people are the key to realizing our long-term management vision.

We are a diverse firm with about 29,000 people from over 70 nationalities working in more than 30 countries. To meet the increasingly diverse needs of our clients, our diverse workforce by age, gender, and nationality must make full use of their various backgrounds to continue to create new added value.

At Nomura, all employees have the opportunity to take on new challenges to realize their full potential. We believe people become responsive to change by gaining experience and overcoming individual challenges.

Nomura at 90 Years. The Road Ahead

This year we are celebrating our 90th anniversary. In 1925, Nomura Securities was spun off from Osaka Nomura Bank. We were a latecomer to the Tokyo market, and our most-important mission at the time was to gain client recognition by responding accurately to their needs. Each Nomura employee committed to give their all for our clients and remain positive no matter how difficult the environment became. That is the Nomura DNA.

In 1941, we became the first Japanese securities firm to start offering investment trusts. And in 1961, we arranged the first ADR issuance by a Japanese company. Over the years, we have achieved many firsts in terms of products, services, and transactions. The environment we operate in has changed constantly, and we have continued to survive for 90 years thanks to our determination to take on new challenges and the intent focus of Nomura people to "place our clients at the heart of everything we do."

The needs of society and our clients are transforming faster than we think. If we don't move swiftly and respond accordingly, we won't be valued by society or our clients. As such, in our 90th year, we are transforming ourselves and taking on new challenges.

As we head towards our centenary, we remain focused on establishing a solid presence as Asia's global investment bank.

Koji Nagai
Group CEO

COO and Regional CEO Roundtable Message from the CFO
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