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Lehman deal helps Nomura back to profit

JAPAN&rsquo;S largest brokerage Nomura reported its first profit in six quarters yesterday, as the purchase of Lehman Brothers&rsquo; European and Middle Eastern assets began to pay off.<br /><br />The firm posted profit before tax of 31.4bn yen (&pound;200m) for the three months ending 30 June, compared to a loss of 84.3bn yen in the equivalent quarter of last year.<br /><br />Nomura said the acquisition of Lehman Brothers&rsquo; assets was beginning to bear fruit as the firm bids to grow its presence outside Japan.<br /><br />The brokerage also benefited from a stampede of Japanese firms enlisting it to underwrite equity offerings amid the recent stock market rally.<br /><br />Japanese companies sold $13.8bn (&pound;8.4bn) in shares in the quarter, six times the level seen in the same quarter of 2008.<br /><br />Nomura&rsquo;s retail arm delivered a rise in operating profits from 16.2bn yen in the second quarter of last year to 27.9bn yen, as a 23 per cent gain in the Nikkei index during the period bolstered client assets.<br /><br />The global markets division, which handles equity and fixed income trading, enjoyed a dramatic reversal of fortunes, turning last year&rsquo;s 61.6bn yen second-quarter loss into a 62.2bn yen operating profit.<br /><br />However, investment banking fell to an operating loss of 5.4bn yen, largely due to expenses incurred with the purchase and integration of Lehman Brothers&rsquo; assets. Revenues also declined 11.4 per cent,<br /><br />Total assets as of 30 June were 27.5 trillion yen, up 2.7 trillion yen from the quarter to the end of March.<br /><br />However, the company did not offer an earnings forecast for the full year, citing &ldquo;uncertainties due to, but not limited to, economic and market conditions&rdquo;.