Corporate Governance | Basic Policy for Strategic Shareholdings
Over the past 20 years, Nomura Group has consistently reduced its investments in strategic shareholdings that are not used for pure investment purposes. As of the end of March 2023, our Company held 210 companies’ stocks. Total amount recorded on the balance sheet was 85.6 billion yen (total market value of holdings) representing only 2.7% of our Tier 1 capital.
Strategic Shareholdings (Billions of Yen)
We have ongoing discussions concerning the value of strategic shareholdings (see the right chart). Regarding strategic shareholdings, we balance the risks and costs involved in holding such shares with potential benefits into business strategy, such as additional opportunities to increase the revenues of our businesses through expansion of transactions, or business alliances with partners whose shares are held, and Nomura shall hold such shares only if such shareholdings will contribute to maintaining or enhancing the corporate value of the Nomura Group. These topics are discussed by the Investment Securities Committee established by the Board of Directors. As a result, we will proceed with the sale of such shareholdings, where it has been determined to be reasonable upon consideration of the impact on the market and other circumstances.
To date we have sold approximately 40% of the strategic shareholding names in the 10 years since 2013. Going forward, we will continue to sell such shares by setting a new target of reducing the names of shareholdings held (including unlisted names) by 25% in the 5 years from April1, 2022 to March 31, 2027.
Process for Reviewing the Value of Strategic Shareholdings
Quantitative Analysis Regularly Held for All Strategic Shareholdings
Verification of whether the return on required capital (revenues and dividends from transactions with companies, etc.) exceeds the required level. If it meets the required level, we will consider continuous holding, and if not, we will conduct further qualitative analysis.
Confirm Medium to Long-Term Revenue Projections for Qualitative Analysis
Qualitative analysis considers whether to consider continuous holding or pursue a sale, based on medium-to-long-term revenue projections, holding objectives and period, relationships with issuers and regional economies, and other strategic factors.