Lehman deal helps Nomura back to profit
JAPAN’S largest brokerage Nomura reported its first profit in six quarters yesterday, as the purchase of Lehman Brothers’ European and Middle Eastern assets began to pay off.
The firm posted profit before tax of 31.4bn yen (£200m) for the three months ending 30 June, compared to a loss of 84.3bn yen in the equivalent quarter of last year.
Nomura said the acquisition of Lehman Brothers’ assets was beginning to bear fruit as the firm bids to grow its presence outside Japan.
The brokerage also benefited from a stampede of Japanese firms enlisting it to underwrite equity offerings amid the recent stock market rally.
Japanese companies sold $13.8bn (£8.4bn) in shares in the quarter, six times the level seen in the same quarter of 2008.
Nomura’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.
The global markets division, which handles equity and fixed income trading, enjoyed a dramatic reversal of fortunes, turning last year’s 61.6bn yen second-quarter loss into a 62.2bn yen operating profit.
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’ assets. Revenues also declined 11.4 per cent,
Total assets as of 30 June were 27.5 trillion yen, up 2.7 trillion yen from the quarter to the end of March.
However, the company did not offer an earnings forecast for the full year, citing “uncertainties due to, but not limited to, economic and market conditions”.