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Japan’s Nomura Posts Profit Despite Volatility, Geopolitical Risk

Net profit came in at about 31 billion yen, compared with a 155 billion yen loss in the same quarter last year related to the collapse of Archegos Capital Management


Nomura
Pretax income for Nomura's wholesale division, which houses its trading and investment banking businesses, was 37.0 billion yen compared with 40.8 billion yen in the third-quarter. Photo: Reuters

 

Nomura Holdings, Japan’s biggest brokerage and investment bank, reported a profit for the fourth successive quarter despite financial market volatility in the wake of the Ukraine war.

Net profit for January-March came in at about 31 billion yen ($242 million), compared with a 155 billion yen loss in the same quarter last year related to the collapse of its prime brokerage client, Archegos Capital Management.

The result was only around half the amount logged in the third-quarter.

“Higher US interest rates and greater geopolitical risks caused market volatility, dampening client activity and hurting the value of our securities holdings,” Takumi Kitamura, chief financial officer, said.

Pretax income for Nomura’s wholesale division, which houses its trading and investment banking businesses, was 37.0 billion yen compared with 40.8 billion yen in the third-quarter.

Equity underwriting fees plunged as IPOs dried up and fixed-income trading revenue also sagged in comparison to the previous quarter.

While income for its mergers and acquisitions advisory business rose as some deals agreed last year were completed, there has since been a slowdown in global M&A.

Nomura’s investment management business logged an 8.8 billion yen loss and income for its retail business slid 71% from the third-quarter, also hit by Russia’s invasion of Ukraine and the prospect of rising global interest rates.

Nomura also said it would buy back shares worth up to 30 billion yen, equivalent to up to 1.5% of its outstanding stock.

 

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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