Japan’s Biggest Brokerage Posts Record Earnings for Second Straight Year, Results Overshadowed by Market Volatility

Japan’s largest brokerage reported record earnings for the second consecutive year, yet its stock performance failed to reflect the financial strength, according to market analysts and trading data released this week. Nomura Holdings announced net profit of ¥482.3 billion for the fiscal year ended March 2024, a 12% increase from the prior year and the highest in its history. Revenue rose 9% to ¥2.1 trillion, driven by stronger-than-expected performance in its global markets and investment banking divisions. The results exceeded consensus forecasts by 8%, with particularly strong contributions from equity trading in Asia and fixed income sales in Europe. Despite the earnings beat, Nomura’s share price declined 3.4% on the Tokyo Stock Exchange following the announcement, closing at ¥682. Analysts noted the disconnect between financial results and market reaction, pointing to persistent concerns over the firm’s domestic retail business and wealth management segment, which reported flat inflows and declining fee income for the third straight quarter. Investment flows into Nomura’s asset management arm slowed to ¥120 billion in net fresh money during the quarter, less than half the inflow recorded during the same period last year. Meanwhile, rival brokerages Daiwa Securities and SBI Holdings reported stronger retail client acquisition, with Daiwa citing a 15% year-on-year increase in new individual investor accounts. Nomura’s CEO, Kentaro Okuda, acknowledged the market’s skepticism during a post-earnings briefing, stating that the firm is “recalibrating its domestic strategy to better align with evolving investor preferences.” He emphasized ongoing efforts to restructure the wealth management platform and reduce reliance on legacy commission-based products. The brokerage maintains a core Tier 1 capital ratio of 14.2%, well above regulatory minimums, and declared a full-year dividend of ¥80 per share, up 11% from the prior year. Nomura’s board reaffirmed its capital return policy, targeting a 50% payout ratio over the medium term. No immediate changes to leadership or strategic priorities were announced. The firm said it will provide an update on its domestic business transformation plan at its next investor meeting scheduled for June 2024.