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Nomura Q3 Profit Climbs 13% - Update

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1/31/2013 1:44 AM ET

Financial services provider Nomura Holdings Inc. (NMR: Quote) Thursday said third quarter net income increased 13 percent from the prior year, while its firm-wide net revenue and income before income taxes fell slightly, despite higher revenues and income in all business divisions.

Koji Nagai, Nomura's Group CEO, said, "We had a solid third quarter with all three business divisions and all regions profitable on a pretax basis. Pretax income from our core business segments jumped more than fourfold compared to last quarter and we reported our fifth straight quarter of pretax profits."

On a firm-wide basis, net revenue was 389.1 billion yen or $4.5 billion, down 3 percent from the previous quarter and 4 percent from the same quarter last year.

The firm witnessed a 16 percent decline in revenues at consolidated entities related to Nomura Land and Building, and a loss of 23.2 billion yen due to the tightening of credit spreads at Nomura and its counterparties.

Additionally, non-interest expenses included a 24.1 billion yen write-down of real estate mainly held by consolidated variable interest entities.

These factors led to a 62 percent plunge in income before income taxes to 13 billion yen.

Net income for the quarter was 20.1 billion yen or $232 million. This is up 13 percent from last year and represents a seven times increase from the prior quarter.

According to Nomura, majority of the 24.1 billion yen real estate write-down is attributable to third parties, and hence the negative impact on net income was only 2.1 billion yen.

Segment-wise, net revenue in Retail increased 20 percent to 95.7 billion yen and income before income taxes increased 101 percent to 20.3 billion yen.

Asset Management reported net revenue of 18.8 billion yen, up 23 percent from last year. Income before income taxes jumped 72 percent to 7.3 billion yen.

Net revenue in the Wholesale business increased 8 percent to 189 billion yen while income before income taxes climbed 20 percent. All businesses and each region of the firm's international operations reported higher revenues in the third quarter.

The stock is currently adding 2.1 percent in Tokyo at 526.00 yen.

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by RTT Staff Writer

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