Nomura Holdings Inc Adr ((NMR)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Nomura Holdings Inc Adr’s recent earnings call presented a balanced sentiment, highlighting both strong performances and notable challenges. The company reported impressive achievements in Wealth and Investment Management, as well as record highs in equities revenue. However, these successes were tempered by declines in overall net revenue and income, alongside challenges such as the impact of phishing scams and increased expenses.
Strong Performance in Wealth and Investment Management
Wealth Management net revenue saw a significant increase of 10% to JPY 116.5 billion, with income before income taxes growing by 17% to JPY 45.5 billion. Similarly, Investment Management reported a 20% rise in net revenue to JPY 60.8 billion, and a remarkable 43% increase in income before income taxes, reaching JPY 30.7 billion.
Record Highs in Equities Revenue
Equities revenue reached a new high, rising 16% to JPY 113.8 billion. This was driven by heightened client activity in Japan and AEJ, alongside strong performances in derivative and Americas businesses.
Consistent Profitability in International Regions
The company’s international regions reported a 63% increase in income before income taxes, totaling JPY 44.9 billion. This marks the ninth consecutive quarter of profitability for these regions.
Improved Return on Equity
Nomura Holdings achieved a return on equity of 10.6%, surpassing its quantitative target of 8% to 10% for the sixth consecutive quarter.
Decrease in Group-wide Net Revenue and Income
Despite strong performances in certain areas, group-wide net revenue fell by 2% to JPY 515.5 billion, and income before income taxes decreased by 15% to JPY 136.6 billion. Net income also saw a decline of 12%, amounting to JPY 92.1 billion.
Impact of Phishing Scams
The company faced a financial impact of JPY 4.8 billion due to phishing scams, despite efforts to mitigate the damages.
Expense Increase
Group-wide expenses rose by 4% to JPY 378.8 billion, with compensation and benefits increasing by 5% due to higher performance-linked bonus provisions.
Forward-Looking Guidance
Looking ahead, Nomura Holdings expects continued strong performance in Wealth and Investment Management, with net revenue and income before income taxes showing significant growth. The Wholesale division is also anticipated to maintain its upward trajectory. Despite a 2% decrease in group-wide net revenue, excluding real estate sales gains, net revenue actually increased by 10%. The company declared a dividend of JPY 27 per share, with a payout ratio of 40.3%.
In summary, Nomura Holdings Inc Adr’s earnings call reflected a balanced sentiment, with strong performances in key areas such as Wealth and Investment Management and record equities revenue. However, challenges like phishing scams and increased expenses posed significant hurdles. Looking forward, the company remains optimistic about its growth prospects, particularly in international regions and investment management.