Wholesale | Shaping our Future

At Nomura, all the divisions and regions work collaboratively to provide best-of-breed products and solutions to meet the diverse needs of our clients globally. For example, we have a robust underwriting and distribution capability, with shares and bonds underwritten by Investment Banking and distributed to a broad investor base globally by Global Markets and Retail branches. Global Markets also provides secondary market liquidity, market and macro insights, and investment ideas to help clients effectively manage their portfolios.

Nomura positions Asia-Pacific as our "mother-market." We have an unparalleled presence in Japan, as evidenced by our #1 rank in the Japan ECM underwriting league table^*1, and a top-tier market share of volumes traded in Tokyo Stock Exchange and a high market share in JGB auctions.

Nomura's international network spans more than 30 countries and regions including the Americas, EMEA and Asia ex-Japan, and we support clients globally. This is complemented by 15 primary dealerships in major markets around the globe, a Top-10 U.S. Fixed Income franchise^*2 including a Top-3 market maker position for U.S. Agency Securities^*3 (Fannie Mae, Freddie Mac, etc.). We were also ranked #7 in the Global SSA^*4 underwriting league table.

As our clients globalize their businesses, we have strengthened our cross-regional and cross-divisional collaboration in Wholesale to offer holistic support to clients encompassing cross-border M&A, capital-raising, and currency and interest rates hedging.

• 1 Source: Thomson Reuter (April 2015 to March 2016)

• 2 Source: Greenwich Associates, 2015

• 3 Source: U.S. Federal Reserve

• 4 Sovereign, Supranational and Agency. Source: Dealogic (Jan to Dec 2015)

FY2015/16 was a challenging year, with macroeconomic headwinds emerging from the resurgence of the Greek debt crisis, the slowdown in the Chinese economy, diverging central bank policies, and a sharp decline in commodity prices, especially crude oil. Secondary market liquidity including stock, bond and loan markets declined further during the year, impacting client activity and the fee pool for the industry.

In primary markets, the issuance of equities and bonds decreased on the back of volatile markets and global economic uncertainty. The M&A market was very active with an increase in companies looking to expand their businesses through industry consolidation or strategic acquisition of companies.

In FY2016/17, we expect the market environment to continue to be challenging. On the regulatory front, we continue to pay close attention to the pace of reform. The purpose of these regulations is to ensure the stability of the broader financial system, the health of relevant entities and the protection of clients. However, required changes to comply with upcoming rules may lead to a reduction in capacity and liquidity provided by market participants. It is our mission to play a role as a liquidity provider and respond to the various needs of our clients, while maintaining a resilient risk culture as well as flexible resource allocation.

Furthermore, the Corporate Governance Code went into effect in June 2015 in Japan. As our corporate clients look to improve their ROE, we will provide tailor-made solutions to meet the specific requirements of each of our clients. For example, we have supported many clients in unwinding their cross shareholdings and share buybacks using derivative solutions.

In April 2016, Wholesale conducted a strategic review of the business portfolio in EMEA and the Americas. The purpose of this exercise was to reallocate our managerial resources to further focus on selected businesses where we have expertise and competitive advantages, and position our business to deliver sustainable profit across market cycles.

In detail, we continue to strengthen our Global Macro business including Rates products and our Emerging Markets platform, building on our success in the past few years. We also remain focused on reinforcing our agency execution business, Instinet, which includes expanding our product offering to position the business as a multi-asset agency platform. In the M&A advisory business where we see increasing client demand, we continue to provide high-quality services while also seeking to provide clients with ancillary financing and risk solutions including interest rates and FX hedges. The new Wholesale structure has reinforced the partnership between Global Markets and Investment Banking, which should encourage product innovation and improve 'time to market,' especially for our Solutions businesses.

Such strategic review of the businesses in EMEA and the Americas will enable us to have a stronger focus on our areas of strength, which should support our transition to a more profitable and sustainable business model. In Asia-Pacific, our business will not be negatively affected by these changes. We will maintain and seek to further grow the existing full-service platform, to tap into various business opportunities that arise on the back of medium- to long-term growth in the region. We will continue to deliver competitive products and services to our clients by connecting markets East and West, leveraging our strengths in Asia-Pacific as well as our broad client base and strong product capabilities in EMEA and the Americas.

Nomura has been promoting SRI as an investment strategy for Japanese retail investors, and established a track record in this field. In October 2015, we arranged and sold Education, Youth and Employment (EYE) Bonds to retail investors in Japan. Also, our continuous efforts resulted in a total sale of over ¥56 billion in World Bank Sustainable Development Bonds, making it this product's largest distributor in the Uridashi market. We will continue to offer investment products that contribute to the resolution of social issues and help create a more affluent society by serving as an intermediary between individuals who are interested in participating in providing solutions to social and environmental issues, and projects or funding needs in developing countries.