Nomura Holdings Q1 Profit Plummets - Update

(RTTNews) - Financial services company Nomura Holdings Inc. (NMR: News ) reported Friday a plunge in earnings in the first quarter, due to a 48.7% decline in revenues from Wholesale segment, which were hurt by reduced gain on trading.

Net income attributable to shareholders plunged 79.7% to 2.32 billion yen from 11.42 billion yen. On a per American Depositary Receipt, or ADR basis, earnings fell 65.2% to 0.63 yen from 1.81 yen a year ago.

Return on shareholders' equity was 0.4% for the quarter, compared with 3.0% a year ago.

Total revenues declined 13.6% to 314.01 billion yen from 363.6 billion yen last year. Excluding expenses, net revenue was lower 12.9% at 259.82 billion yen, compared with 298.36 billion yen.

The company said that in business segment totals, which exclude unrealized gain and loss on investments in equity securities held for operating purposes, net revenue was 270.4 billion yen, a decrease of 6.3% from the prior year.

The Japan-based financial company operates and manages its business, merging the Global Markets, Investment Banking, and Merchant Banking divisions into the Wholesale division. Nomura now operates three divisions spanning Wholesale, Retail, and Asset Management.

At the Wholesale division, revenue plummeted 48.7% to 108.6 billion yen from 211.7 billion yen, reflecting lower net gain on trading. Asset Management revenues edged down 2.8% to 18.1 billion yen from 18.7 billion yen. Assets under management was 22.2 trillion yen at the end of June 2010.

However, Retail revenues rose 16.3% to 111.0 billion yen from 95.4 billion yen, on higher commissions for distribution of investment trusts. Other revenues were 32.73 billion yen, compared with loss of 37.13 billion yen a year ago.

Non-interest expenses decreased 5.1% to 253.4 billion yen from 266.9 billion yen in the year-ago quarter. As of June 30, total assets edged up to 33.93 trillion yen from 33.23 trillon yen as of March 31, reflecting primarily the increase in Trading assets.

This includes cash and cash deposits of 1.04 trillion yen, versus 1.35 trillion yen. Total loans and receivables declined to 1.97 trillion yen from 2.07 trillion yen. Collateralized agreements rose to 12.76 trillion yen from 12.46 trillion yen. Trading assets and private equity investments were higher at 16.40 trillion, versus 14.70 trillion.

As of June 30, total liabilities were 31.8 trillion yen, compared with 30.09 trillion yen the preceding quarter, reflecting the increase in Securities sold under agreements to repurchase.

This includes a decline in payables and deposits to 1.46 trillion yen from 1.52 trillion yen. Total collateralized financing rose to 12.28 trillion yen from 11.21 trillion yen. Trading liabilities were lower at 8.14 trillion yen, versus 8.35 trillion yen. Long term borrowings increased to 7.75 trillion yen from 7.19 trillion yen the preceding quarter.

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