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Nomura Reports Fourth Quarter and Full Year Financial Results
April 26, 2023
Nomura Holdings, Inc.
- Three segment pretax income of Y106.4bn, 48% lower YoY
- Retail recurring revenue lifted higher YoY by net inflows of recurring revenue assets; Recurring revenue cost coverage ratio at the 50% level
- Investment Management business revenue roughly unchanged YoY on inflows into core investment trusts and alternative assets; Lower performance fees offset by improved performance in aircraft leasing business
- Fixed Income and Equities revenues stronger YoY, though Wholesale performance impacted by yen depreciation
- Year-end dividend of 12 yen per share, making annual dividend of 17 yen; Full-year ROE of 3.1%
- Robust financial position with consolidated CET1 ratio of 16.2% and liquidity portfolio of Y7.6trn
Tokyo, April 26, 2023 - Nomura Holdings, Inc. today announced its consolidated financial results for the fourth quarter and full year ended March 2023.
For the full year period, net revenue was 1,335.6 billion yen (US$10.1 billion)1 , representing a decrease of 2 percent year on year. Income before income taxes was 149.5 billion yen (US$1.1 billion) and net income attributable to Nomura Holdings shareholders was 92.8 billion yen (US$699 million). Diluted net income attributable to Nomura Holdings shareholders per share was 29.74 yen.
Net revenue in the fourth quarter was 324.9 billion yen (US$2.4 billion), decreasing 17 percent quarter on quarter and 5 percent year on year. Income before income taxes was 22.7 billion yen (US$171 million) and net income attributable to Nomura Holdings shareholders was 7.4 billion yen (US$56 million). Diluted net income attributable to Nomura Holdings shareholders per share was 2.34 yen.
“We reported net revenue of 1,335.6 billion yen and net income of 92.8 billion yen for the full year, both representing a year on year decline amid volatile markets due to heightened geopolitical risks, inflation and central bank monetary policy tightening,” said Kentaro Okuda, Nomura President and Group CEO.
“This past year, we focused on developing new areas of business, bolstering our existing businesses and better positioning ourselves to meet the individual needs of our clients.
“In Retail, we continued to provide clients with detailed consulting services to adapt to the changing environment and our efforts to increase client assets gained traction. As a result, Retail reported net inflows of recurring revenue assets in all four quarters and our recurring revenue cost coverage ratio increased to the 50 percent level.
“Investment Management business revenue was roughly unchanged from the previous year. The division also booked continued inflows into core investment trusts and alternative assets.
“In Wholesale, Global Markets booked stronger Fixed Income revenues. In Investment Banking, Advisory revenues remained solid on contributions from equity private placement deals, offsetting a significant decline in global fee pools, while the ECM business improved from a slow first half.
“As we navigate the changing market environment, we remain committed to meeting the diverse needs of our clients and delivering sustainable growth.”
1 US dollar amounts are included solely for the convenience of the reader and have been translated at the rate of 132.75 yen = 1 US dollar, the noon buying rate in New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2023. This translation should not be construed to imply that the yen amounts actually represent, or have been or could be converted into, equivalent amounts in US dollars.
Divisional Performance
Retail
| (Billions of Yen) | FY2022/23 Q4 |
QoQ | YoY |
|---|---|---|---|
| Net revenue | 75.3 | -7% | 7% |
| Income (loss) before income taxes | 9.8 | -26% | 89% |
Retail reported net revenue of 75.3 billion yen, decreasing 7 percent quarter on quarter and up 7 percent from the same period last year. Income before income taxes was 9.8 billion yen, down 26 percent quarter on quarter but up 89 percent year on year.
Retail recurring revenue was stronger year on year, lifted by net inflows of recurring revenue assets on the back of successful efforts to grow client assets.
Despite ongoing market uncertainty, flow business client numbers grew in the fourth quarter as multiple public and secondary offerings provided opportunities to deepen interactions with clients.
Flow revenue decreased mainly in the first half amid market uncertainty. On a quarter on quarter basis, flow revenue slowed due to insurance, bonds and stocks.
Investment Management
| (Billions of Yen) | FY2022/23 Q4 |
QoQ | YoY |
|---|---|---|---|
| Net revenue | 37.8 | -34% | 3.8x |
| Income (loss) before income taxes | 16.4 | -51% | - |
Investment Management net revenue was 37.8 billion yen, down 34 percent quarter on quarter and 3.8 times higher than the same quarter last year. Income before income taxes was 16.4 billion yen, down 51% quarter on quarter.
Business revenue remained roughly unchanged year on year as improved performance in Nomura Babcock & Brown’s aircraft leasing business offset a decline in performance fees. In the fourth quarter, investment gain/loss contributed to revenues, although declining from the strong prior quarter. As a result, divisional performance slowed from the previous year.
Solid asset management business performance in the fourth quarter was underpinned by continued inflows into core investments, the bank channel and alternative investments.
Wholesale
| (Billions of Yen) | FY2022/23 Q4 |
QoQ | YoY |
|---|---|---|---|
| Net revenue | 178.8 | -5% | -8% |
| Income (loss) before income taxes | -14.2 | - | - |
Wholesale booked net revenue of 178.8 billion yen, decreasing 5 percent quarter on quarter and 8 percent year on year. Loss before income taxes was 14.2 billion yen.
Macro Products underpinned stronger Fixed Income revenues for the full year, offsetting a slowdown in March due to a spike in volatility. Equities revenues increased as losses related to transactions with a US client were no longer present. In Investment Banking, Advisory revenues declined from the record level in the prior year2 but remained solid on contributions from equity private placement transactions. Financing revenues were sluggish in the first half due to market uncertainty, but improved in the second half driven by Japan ECM. Overall Wholesale performance was impacted by higher costs mainly related to yen depreciation.
2 Since FY2012/13
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- The information and opinions contained in this document have been obtained from sources believed to be reliable, but no representations or warranty, express or implied, are made that such information is accurate or complete and no responsibility or liability can be accepted by Nomura for errors or omissions or for any losses arising from the use of this information.
- This document contains statements that may constitute, and from time to time our management may make "forward-looking statements" within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Any such statements must be read in the context of the offering materials pursuant to which any securities may be offered or sold in the United States. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. Important factors that could cause actual results to differ from those in specific forward-looking statements include, without limitation, economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, and the number and timing of transactions.
- The consolidated financial information in this document is unaudited.
Nomura
Nomura is a global financial services group with an integrated network spanning over 30 countries and regions. By connecting markets East & West, Nomura services the needs of individuals, institutions, corporates and governments through its three business divisions: Retail, Investment Management, and Wholesale (Global Markets and Investment Banking). Founded in 1925, the firm is built on a tradition of disciplined entrepreneurship, serving clients with creative solutions and considered thought leadership. For further information about Nomura, visit www.nomura.com.
