Nomura profits jump on strong Japanese stock market growth

Tim Wallace
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PROFITS at Nomura surged in the third quarter, the Japanese investment bank reported yesterday, as stock markets rallied over the period.

Pre-tax income rose 33.6 per cent on the year to ¥116bn (£651m) in the quarter.

Nomura’s retail business contributed strongly, with revenues up nine per cent to ¥128bn.

Increased demand from retail clients for stocks helped push up incomes, while those investors’ assets climbed to a record high of ¥104.8 trillion.

Its investments in other firms also performed strongly thanks to the booming stock market.

Nomura earned ¥18.1bn in unrealised gains on securities held by affiliates, for example, and booked a gain of ¥9.9bn from shares in Ashikaga Holdings.

From the trough in mid-October to the peak in early December, Japan’s Nikkei stock market rose by 24 per cent, boosting Nomura’s own holdings and encouraging retail investors into the market.

However, global markets revenues at the bank were squeezed, falling five per cent on the year to ¥149.7bn, and investment banking revenue fell by the same proportion to ¥29.2bn.

At the same time non-interest expenses in the units rose 11 per cent to ¥178.5bn, effectively wiping out pre-tax profits – net income fell 98 per cent to ¥0.5bn.

“The main reason for the decline was a significant drop in fixed income revenues in EMEA (Europe, the Middle East and Africa) and the Americas as a result of the challenging trading environment, on the back of a decline in yields and a spike in volatility in October,” said the bank.

Nomura’s Japan-listed shares fell 1.22 per cent on the day.

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