Japan's major financial services company Nomura Holdings, Inc. (NMR) reported Tuesday that it returned to profit for the third-quarter, helped by strong revenue growth across segments. The group has been reporting profit for the third straight quarter, booking higher revenues.
The financial service group's quarterly net income attributable to Nomura Holdings was 10.2 billion yen, or US$110 million, versus a net loss attributable to Nomura Holdings of 342.89 billion yen last year. Earnings per share were 2.89 yen, compared to loss per share of 180.97 yen in the prior year quarter. Prior to taxation, the group earned 17.95 billion yen compared with a loss of 399.61 billion a year ago.
Nomura Holdings' quarterly net revenues were 274.5 billion yen, or US$2.95 billion, compared with a negative revenue of 49.75 billion yen in the same quarter a year earlier. The company witnessed improvement across commissions, investment banking fees, interest and dividends, trading gains and other revenues, gains from investment in equity securities, asset management and portfolio services fees, as well as, private equity investment gains. The group demonstrated strong performance across segments.
By segments, net revenue in Retail was 104.3 billion yen, higher than 69.65 billion yen helped by continued focus on providing consulting services; increased subscriptions for Japanese equities and an increase in Retail client assets.
Global markets net revenues shot up to 163.9 billion yen from negative revenues of 171.08 billion yen. In Global Equities, the group topped Tokyo and London stock exchanges and witnessed a "sharp" increase in trading volume in India and Malaysia, new markets where it received stock broking licenses. In Global Fixed Income, it continued to experience substantial growth in trading volumes.
Investment banking division demonstrated strong performance with improved revenues of 44.5 billion yen versus 22.65 billion yen in the previous year, helped by providing underwriting services, domestic financial services. Overall wholesale net revenue, the total of Global Markets and Investment Banking, was 208.3 billion yen.
Merchant banking services revenue improved to 1.8 billion yen from negative revenues of 34.98 billion yen, as it continued to raise the value of its investee companies during the quarter.
Asset management arm booked revenues of 17.2 billion yen, up from earlier year's 10.84 billion yen. Internationally, it saw significant increase in overseas investment advisory assets under management from areas including Asia, Islamic markets, and Europe.
During the three-month period, the group reduced both its interest expenses and non-interest expenses to 47.05 billion yen and 256.58 billion yen, from 52.45 billion yen and 349.86 billion yen, respectively.
Pursuant to its dividend policy, Nomura confirmed that dividends for the fiscal year ending March 31, 2010, will be paid semi-annually and that Nomura will forgo dividend distribution for the period ending December 31, 2009. The group had total assets of 29.8 trillion yen, with shareholders' equity of 2.11 trillion yen, as of December 31, 2009.
Nomura President and CEO Kenichi Watanabe noted that, "Our Retail division focused on providing customers with consulting services and capitalized on a rise in public offerings, while also achieving growth in purchases of investment trusts. Although revenues in Global Markets were sluggish due to reduced investor activity, Investment Banking returned to profit for the first time in six quarters on the back of the rise in public offerings. Overall, our wholesale platform continued to build momentum during the third quarter. Asset Management also continued to deliver steady returns."
For the nine month period, the company recored a profit attributable to NHI of 49.37 billion yen or 16.67 yen per share compared with a loss of 492.35 billion yen or 258.62 yen per share. The group's net revenue was 872.9 billion yen versus 213.46 billion yen a year ago.
NMR finished Monday's trading at $7.60, on the NYSE.
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