Q3 2024 Nomura Holdings Inc Earnings Release
Company Representative: To the details of the performance of each business, please take a look at the bottom right, which shows three segment income before income taxes of 70.5 billion yen, up 16% over the last quarter. Our international wholesale business reported an uptick in client activity towards the end of the quarter, and all international regions had a profitable quarter. Diluted earnings per share for the quarter was 16.1 yen, and return on equity was 6.2%. While this represents a positive trend towards improved performance, we are still not where we want to be.
Please take a look at the bottom right, which shows three segment income before income taxes of $70 5 billion up 16% over the last quarter, our international wholesale business reported an uptick in client activity towards the end of the quarter and all international regions had a profitable quarter diluted earnings per share.
For the quarter was 16.1 yen and return on equity was six 2%. While this represents a positive trend towards improved performance. We are still not where we want to be with this momentum and performance and given a sufficient capital base today, we resolved to set up a share buyback program in order to raise capital.
Company Representative: With this momentum in performance and given a sufficient capital base, today, we resolved to set up a share buyback program in order to raise capital efficiency and secure a flexible capital management policy and to deliver shares on the exercise of stock-based compensation. The program will run from February 16th to September 30th and have an upper limit of 125 billion shares, with the upper limit of the aggregate amount of the repurchase price being 100 billion yen. On page three, an update of results for the nine months to December. Net revenue for the period was 1,116.9 billion, up 11% compared to the same period last year. Income before income taxes increased 43% to 181.8 billion, while net income grew 28% to 109.1 billion. EPS was 34.69 yen, and ROE 4.5%. As shown on the right, three segment income before income taxes rose 69% to 159.7 billion dollars, and retail jumped 3.5 times, and investment management increased 56%. Now to business performance in the third quarter, starting with retail on page 6. All the percentages I mentioned from this point on and beyond refer to changes compared to the second quarter.
Patiency and secure a flexible capital management policy and to deliver shares on exercise of stock based compensation.
Graham will run from February 16th two September 30th and have an upper limit of 125 billion shares with the upper limit of the aggregate amount of the repurchase price being 100 billion yen.
On page three update of results for the nine months to December net revenue for the period was one trillion $116 9 billion up 11% compared to the same period last year income before income taxes increased 43% to 181 8 billion, while net income grew 28% to 109.
Point 1 billion EPS was 30, 469, and a four 5% as shown on the right three segment income before income taxes rose fixed.
69% to $159 7 billion income before income taxes, and we'd go jumped three five times and investment management increased 56% note to business performance in the third quarter, starting with retail on basics are the percentages I mentioned from this point and beyond refer to changes compared to the second quarter.
Company Representative: Retail net revenue increased 4% to 102.6 billion, and income before income taxes was 31.9 billion, marking the highest level in eight years since July to September quarter 2015. The reallocation of our partners last spring has delivered steady results, and we are starting to see good signs in terms of the quality and quantity of our dialogue with clients. As you can see on the bottom left, flow revenue increased 7% to 64 billion yen, spurred on by strong equity-related revenues due to favorable market conditions and primary transactions such as the offering by Denso. Recurring revenue and the area of strategic focus were in line with last quarter's record high. Although revenues were up 4%, expenses increased by only 1%, and our recurring revenue cost coverage ratio remains high at 55%. Please turn to page seven for a breakdown of sales by product. Total sales were down 9% at 4.7 trillion yen, but remained high and strong. Sales of stocks were 3.1 trillion yen, substantially higher than the level seen before the first quarter, with this quarter being a notably strong one for primary subscriptions. Insurance sales were at a record high.
Retail net revenue increased 4% to 102 6 billion and income before income taxes was $31 9 billion, marking the highest level in eight years since July to September quarter 2015, the reallocation of our partners last spring has delivered steady results and we are starting to see good signs in terms.
Of quality and quantity of our dialogue with clients as you can see on the bottom left flow revenue increased 7% to 64 billion yen spurred on by strong equity related revenues due to favorable market conditions and primary transactions such as the offering by then so recurring revenue an area of strategic focus was in line.
With last quarters record high.
Although revenues were up 4% expenses increased by only 1% and our recurring revenue cost coverage ratio remains high at 55%. Please turn to page seven for a breakdown of sales by product total sales were down 9% at $4 seven trillion yen, but remained high and.
Strong sales of stocks were 3.1 trillion yen substantially higher than the level seen before the first quarter with this quarter being a notably strong one for primary subscriptions insurance sales were at a record high as we continued to provide consulting for our clients overall portfolio, we are seeing more clients.
Use insurance products for estate planning and retirement funds, which is another benefit from reallocating. Our partners. Please turn to page eight for an update on KP is net flows of recurring revenue assets shown on the top left was 51 4 billion. This was lower than last quarter as the market rally and <unk>.
Rising value of processed products have prompted lower sales than exist. However, excluding corporate section net inflows remained high at 151 5 billion.
Company Representative: As we continue to provide consulting for our clients in our portfolio, we are seeing more clients use insurance products for estate planning and retirement funds, which is another benefit from reallocating our partners. Please turn to page 8 for an update on KPIs. Net flows of recurring revenue assets, shown on the left, were 51.4 billion. This was lower than last quarter, as the market rally and rising value of products prompted large sales and exits. However, excluding the corporate section, net inflows remain high at 151.5 billion.
Right shows recurring revenue assets at a record high of 21 trillion and recurring revenue, which represents stable revenues remained strong flow business client numbers shown on the bottom left or a particularly strong this quarter as we saw the benefits of reassigning sales partner and it has started out with clients on tobacco primary transactions flow business.
<unk> numbers at the end of December were trending 15% above the same period last year at one trillion 450.
<unk> thousand which is approaching our March 2025, K B I targets, our business for our salaried employees of our workplace business continued to grow steadily the number of services delivered was approximately driven by growth in each of our participants.
Company Representative: The top right shows recurring revenue assets at a record high of 21 trillion, and recurring revenue, which represents stable revenues, remains strong. Flow business client numbers shown on the bottom left were particularly strong this quarter, as we saw the benefits of reassigning sales partners and enhanced dialogue with clients on the back of primary transactions. Flow business client numbers at the end of December were trending 15 percent above the same period last year at 1,456,000, which is approaching our March 2025 KPI targets. Our business for salaried employees, or workplace business, continued to grow steadily. The number of services delivered was approximately driven by growth in ESOP participants. See Page 9 for an update on investment management. Net revenue decreased 14% to 38.9 billion yen, and any company for income taxes declined 33% to 15.6 billion yen.
Okay.
Looking for an update on the investment management net revenue decreased 14% or through due to point 9 billion income before income taxes declined 33% of your pain point 6 billion I'll do see on the bottom left civil business revenue was $33 3 billion.
Last quarter, which was a record high since the division was established the neighborhood or into 'twenty, one investments getting those going through 5.6 video you know Sameer.
SUNS reimbursements related to valuation Gainesville slowed please turn to page 10 for an update on when those are the motors I meant the business, which is the source of business revenue as shown on the top left us with under management totaled 78.5 trillion at the end of December representing a record high for the third straight quarter. This is above all.
On March 10, we do 25 Kpis targets of 75.8 reunion on the bottom left net inflows were 330 billion yen with the investment Trust business rebuilding 60 billion of outflows. This was due to an increase himself to lock in profits when the bulk of the market rally.
Our roofs in the other money market funds reported seven 2 billion.
Those those individuals' POG to more idle funds the investment advisory and into those new businesses booked inflows of 385 Btu in Japan reported inflows into yen bond funds flow internationally, we saw inflows into U S. All you the ball on the phones in India equity funds alternative also the money all sorts.
The management still no. They both of them are really just due to the 163 million down slightly due to yen appreciation at the end of the quarter that said inflows continued making progress with our private market interest you are there. Please turn to page 11 for wholesale net revenue increased 6% to 217 billion.
Company Representative: As you can see on the bottom left, stable business revenue was 33.3 billion yen in line with last quarter, which was a record high since the division was established in April 2021. However, investment gain loss declined to 5.6 billion yen as American Century Investments related valuation gain losses slowed. Please turn to page 10 for an update on the asset management business, which is the source of business revenue. As shown on the top left, assets under management totaled 78.5 trillion yen at the end of December, representing a record high for the third straight quarter. This is above our March 2025 KPI target of 75.8 trillion yen. On the bottom left, net inflows were 330 billion yen, with the investment trust business reporting 60 billion yen of outflows. This was due to an increase in sales to lock in profits on the back of the market rally. MRFs and other money market funds reported 70 billion yen of inflows as individuals parked more idle funds.
Before income taxes was 23 BDO yen of 178% performance is improving after having bottomed out in the fourth quarter of last fiscal year or the bonus provisions increased in line with the performance wholesale non interest expenses decreased 1% of severance and related expenses declined.
So the benefits of cost.
Reductions carried out through two last quarter as a result of a cost income ratio dropped to 89%. Please turn to page three for an overview of our results by business line Global markets net revenue was roughly flat at 171, six video and young fixed income revenues increased 7% to 103, four and five.
BT Union, although I mentioned earlier during the first half of the quarter market. These sponsored remained on the sidelines over the uncertainty surrounding monetary policy and geopolitics, but we executed client orders, while stringently managing risks heading into the second half of the quarter as we gain clarity on the outlook.
For interest rates market participant activity improved and we saw an increase in revenue opportunities one of the market conditions weren't easy we booked stronger revenues across all core products such as rates. It makes the E M securitized products and grid.
<unk> net revenue so the 8% to $68 2 billion yen equity products had a strong quarter in the Americas, but revenues were lower in Japan, and Asia or muted volatility and client activity is execution services continued to deliver solely to performance in Japan and lower contributions from primary transactions.
Company Representative: The investment advisory and international businesses booked inflows of 385 billion yen. Japan reported inflows into yen bond funds, while internationally, we saw inflows into U.S. high yield bond funds and India equity funds. Alternative assets under management, shown on the bottom right, stood at 1.6 trillion yen, down slightly due to yen appreciation at the end of the quarter. That said, inflows continued, and we are making progress with our private market initiatives. Please turn to page 11 for wholesale. Net revenue increased 6% to 217 billion yen. Income before income taxes was 23 billion yen, up 178%.
And higher trading volumes on the bulk of heightened interest in Japanese equities film domestic and foreign institutional investors. Please turn to page 13 for investment management investment banking results net revenue was $45 4 billion up 36%.
Driven by strong performance in Japan, and EMEA. This represents the best quarter since the first fiscal year ended March 2017, when comparisons are possible as shown on the left advisory and financing and solutions. Both reported revenue growth in advisory we talked about 'twenty two 'twenty three a M. On day League table. So building numerous transactions include.
Management, the biodiesel business their holdings and outsourcing and are being kept or sale of its stake in <unk> holdings to Nippon life insurance.
In the financing transactions, we supported the airports of corporates to strengthen their corporate governance through deals such as a large offering by Denso and international offering by US like your group, we provide it to a diverse range of solutions for issuance taking up the challenges of structuring the new fund raising methods.
Company Representative: Performance is improving after having bottomed out in the fourth quarter of last fiscal year. Although bonus provisions increased in line with performance, wholesale non-interest expenses decreased 1% as severance-related expenses declined, and we saw the benefits of cost reductions carried out through the last quarter. As a result, our cost-income ratio dropped to 89%. Please turn to page 12 for an overview of results by business line. Global markets' net revenue was roughly flat at 171.6 billion yen.
Just bond type class shares issued by Softbank and digitally truck the green bond issued by Staci.
Please turn to page 14 for an overview of noninterest expenses group wide expenses increased 3% to 321 5 billion yen compensation and benefits increased 2% to 170.6 video again, Oh, those severance related expenses declined the increases.
Due to yen depreciation and higher bonus provisions in line with improved performance. Please turn to page 14 for an overview of our financial position on capital as shown on the table on the bottom left was 3.4 trade Union risk weighted assets were $18 four trillion, our tier one capital ratio was 18, 3% in <unk>.
Company Representative: Fixed income revenues increased 7% to 103.5 billion yen. As I mentioned earlier, during the first half of the quarter, market participants remained on the sidelines over the uncertainty surrounding monetary policy and geopolitics, but we executed client orders while stringently managing risk. Heading into the second half of the quarter, as we gained clarity on the outlook for interest rates, market participant activity improved, and we saw an increase in revenue opportunities. While market conditions weren't easy, we booked stronger revenues across core products such as rates, FXEM, securitized products, and credits. Equity's net revenue slowed 8% to 68.2 billion yen.
The common equity tier one ratio capital ratio of 16, 2% on the scoring that we continue to maintain a robust financial position that concludes the overview of our third quarter results to sum up spurred on by structural changes in the Japanese market in the third quarter. We are able to we were able to deliver city.
<unk> results by leveraging our strengths centered around our home markets and industrial music initiatives, we have been implementing redo how did the best set of results in eight years in investment banking revenues were at record levels. As we provided a wide range of support for various corporate actions by Japanese companies. The Nikkei has continued to run.
Holly into 'twenty, 'twenty, four and we get a real sense that the new Nissan scheme has it been a catalyst to kick start the full fledged shift from savings to offset the formation in just the three weeks through last week, we saw nice ourselves at over one third of our annual sales for 2023.
Company Representative: Equity products had a strong quarter in the Americas, but revenues were lower in Japan and AEJ on the back of muted volatility and client activity. However, execution services continued to deliver solid performance in Japan, while contributions from primary transactions and higher trading volumes on the back of heightened interest in Japanese equities from domestic and foreign institutional investors. Please turn to page 13 for investment banking results. Net revenue was 45.4 billion yen, up 36%, driven by strong performance in Japan and EMEA. This represents the best quarter since the first fiscal year ended March 2017, if comparisons are possible.
We expect in Japanese corporates to step up efforts to enhance their corporate governance and raise capital efficiency and the many corporates are seeking a device fostering in expectations of policy auction by the bank of Japan, We expect to see the good momentum of our Japan business continue.
Our international business in particular micro products.
Off time due to monetary tightening over the past two years. However, as interest rates. Finally P. Go two we started to see signs of improvement towards the end of the quarter in 2020 for other market participants idle funds and pent up demand picks up we expect this positive trend to continue albeit with different intent.
In each region in January retail revenues have remained around similar levels through the third quarter, while wholesale revenues are outpacing the third quarter driven by solid performance in rates in the Americas and equity derivatives in each region when tailwind behind us in both Japan and overseas. It is a.
Company Representative: As shown on the left, advisory and financing and solutions both reported revenue growth. In advisory, we topped the 2023 M&A league table, supporting numerous transactions including management buyouts of Benesse Holdings and outsourcing, and paying capital for its stake in Ichi Holdings to Nippon Life Insurance. In financing transactions, we supported the efforts of corporates to strengthen their corporate governance through deals such as a large offering by Denso and an international offering by Asahi Group. We provided a diverse range of solutions for issuers, taking up the challenges of structuring new fundraising methods such as bond-type class shares issued by SoftBank and a digitally tracked green bond issued by Hitachi. Please turn to page 14 for an overview of non-interest expenses. Group-wide expenses increased 3% to 321.5 million yen.
A good time to tackle the long term issues in order to build a business platform capable of achieving sustainable growth, we will extend our risk like the businesses and to create a structure for consistent revenues, while taking steps to further improve our I really thank you.
Yeah.
Speaker Change: We have a question and answer session now.
Speaker Change: If you have a question.
Speaker Change: Sharp seven.
Speaker Change: If we want to sell a question.
Speaker Change: Press shop seven.
Speaker Change: The first question.
Speaker Change: Is that S. M D C Nikko Securities <unk> San Please go ahead.
Speaker Change: Sure.
Speaker Change: I am a double E F N B C. Nicole I have two questions.
Speaker Change: Page 13 investment banking.
Speaker Change: For Japan.
Speaker Change: In the presentation.
Speaker Change: You mentioned the band so.
Speaker Change: Sorry, he deals.
Speaker Change: Yeah.
Speaker Change: These ideas that are related to strategic holdings and Dennis J.
Company Representative: Compensation and benefits increased 2% to 170.6 billion yen. Although severance-related expenses declined, the increase is due to yen depreciation and higher bonus provisions in line with improved performance. Please turn to page 14 for an overview of our financial position. Tier 1 capital, shown on the table on the bottom left, was 3.4 trillion yen, and risk-weighted assets were 18.4 trillion yen.
Speaker Change: Okay.
Was deal two D leased and make it nonpublic.
Speaker Change: Can you.
Speaker Change: Okay.
Speaker Change: Describe the nature of that potential fee pool of these deals.
Speaker Change: And the revenues that you are expecting in the mid to long run and.
Speaker Change: And of course in the case of dancer.
Speaker Change: There are various stakeholders and.
Interested parties. So it took time for you to structure the deal but.
Company Representative: Our tier 1 capital ratio was 18.3%, and we had a common equity tier 1 capital ratio of 16.2%, underscoring that we continue to maintain a robust financial position. That concludes the overview of our third-quarter results. To sum up, spurred on by structural changes in the Japanese market, in the third quarter, we were able to deliver steady results by leveraging our strengths centered on our home market and the strategic initiatives we have been implementing. Retail had its best set of results in 8 years, and investment banking revenues were at record levels as we provided a wide range of support for various corporate actions by Japanese companies.
Speaker Change: If you have these more more of these deals in the fourth quarter or first quarter.
Speaker Change: Do you think that you will be able to sustain such high level of revenues.
Speaker Change: Drew reference.
Speaker Change: And what is the structural demand and for the time being a what's the pipeline and do you think the pipeline is enough to sustain this level of revenue. That's my first question second page 15.
Speaker Change: Capital policy.
Speaker Change: Three.
Speaker Change: Finalization impact, which you had disclosed most recently 700 billion of.
Speaker Change: Capital buffer exists, but why at this timing of quarter three grass. This is glass prior to stock option.
Company Representative: The Nikkei has continued to rally into 2024, and we get a real sense that the new NISA scheme has been a catalyst to kick-start a full-fledged shift from saving to asset formation. In just the three weeks to last week, we saw NISA sales at over one-third of annual sales for 2023. We expect Japanese corporates to step up efforts to enhance their corporate governance and raise capital efficiency, and many corporates are seeking advice. Factoring in expectations of policy action by the Bank of Japan, we expect to see the good momentum of our Japanese business continue. Our international business, in particular macro products, has had a tough time due to monetary tightening over the past two years.
Speaker Change: Offsetting.
Speaker Change: And why did you decide on that if you think about the stock option.
Speaker Change: Is this within the.
Speaker Change: Profit level it could have been set at a higher level.
Speaker Change: So why at this timing and what kind of discussion had taken place in order to decide on this ceiling amount. Thank you very much first of all on the I B pipeline.
Speaker Change: Yes.
Speaker Change: In Japan, and some other regions, we think that there will be deals.
Speaker Change: The backdrop, there is a requirement for governance reform.
In other words top management of corporates are beginning to think more seriously about governance.
Speaker Change: Ah the fronts that used to be affiliated with our strategic holdings can be freed up for more strategic investment for growth on the other hand, there could be M. B Earth in order to.
Company Representative: However, as interest rates finally peak out, we started to see signs of improvement toward the end of the quarter in 2024. As market participants idle funds, and pent-up demand takes off, we expect this positive trend to continue, albeit with different intensities in each region. In January, retail revenues remained around similar levels to the third quarter, while wholesale revenues were outpacing the third quarter, driven by solid performance in rates in America and equity derivatives in each region.
Speaker Change: Stepped down from the market.
Speaker Change: That kind of action is being taken by corporates and we think that this will be a continued strength you specifically mentioned the dantzler deal.
Speaker Change: The reduction of such policy holdings are further the delisting of parent and subsidiary we think that this kind of a trend will continue.
Speaker Change: Quarter after quarter will there be constant flow of these deals of course, there could be uncertainties, but.
Operator: When tailwinds are behind us in both Japan and overseas, it is a good time to tackle long-term issues. In order to build a business platform capable of achieving sustainable growth, we will expand our risk-light businesses and create a structure for consistent revenues while taking steps to further improve our ROE. Thank you. We have a question and answer session now. If you have a question, press SHARP7. If we want to cancel our question, press sharp 7. The first question is by SMBC Neco Securities, Murata-san. Please go ahead. I'm Muraki, SNBC Niko.
Speaker Change: Such kind of strategic holdings, it's estimated at 50 trailing 60 trade Union.
Speaker Change: So.
Speaker Change: In order to free up those holdings, we think that we will likely see continuation of the.
Speaker Change: Transactions.
Candidly.
Speaker Change: Basel three.
Speaker Change: In fact.
Speaker Change: At the CEO Forum.
Speaker Change: We said that are we think that we have sufficient buffer.
Speaker Change: Yes.
Speaker Change: And.
Speaker Change: Well I at this timing.
Speaker Change: We wanted to.
Speaker Change: Thank you your flexibility as we have been saying, but strategic policy to date and in third quarter.
Speaker Change: We were encouraged by the performance. So those are the biggest factors that we decided to do this resolution at this particular timing.
Questioner (SMBC Neco Securities, Murata-san): I have two questions. On page 13, Investment Banking, for Japan, in the presentation, you mentioned the Denso-Asahi deal. These are deals that are related to strategic holdings, and Benesse was a deal to delist and make it non-public. Can you explain that?
Speaker Change: Yes.
Speaker Change: We are a financial institution and we have.
Speaker Change: Yeah.
Speaker Change: Various corporate related information. So we cannot just arbitrarily set up such a buyback scheme.
Company Representative: Describe the midterm potential fee pool of these deals and the revenues that we are expecting in the mid to long run and, of course, in the case of Denso. There are various stakeholders and interested parties, so it took time for you to structure the deal. If you have more of these deals in the fourth quarter or first quarter, do you think that you will be able to sustain such a high level of revenues through reference, and what is the structural demand and, for the time being, what's the pipeline? Do you think the pipeline is enough to sustain this level of revenue? That's my first question, second page 15 capital policy. But three, the finalization impact, which you had disclosed most recently, 700 billion of capital buffer exists. But why at this timing of quarter three, Gross, this is Gross prior to stock option. Offsetting, And why did you decide on that?
Speaker Change: There was a window of opportunity at this timing and that's one of the reasons why we made a decision 100 billion yen is that high or no.
Speaker Change: Yes.
Aye.
Speaker Change: I think that it's an appropriate level.
Speaker Change: The business side.
Speaker Change: Hasn't used up.
Speaker Change: It's capital and as I mentioned by Ludo caisson, there could be more.
Speaker Change: We will however look at business opportunities and opportunities for growth.
Speaker Change: And the 100 billion yen was the level of that we decided upon to strike a balance between those requirements. Thank you.
Speaker Change: Thank you very much related to acute the first question you mentioned governance, but.
What's Nomura is policy.
Speaker Change: Okay.
Speaker Change: This isn't really impacted the bottom line, but the sales process of the strategic holdings.
Speaker Change: Is there if you offset that with the unrealized losses, but.
Speaker Change: You've sold many of your policy holdings, but what's the strategy, which is stock stages cell and.
Company Representative: If you think about the stock option, is this within the profit level? It could have been set at a higher level. So why at this time and what kind of discussion had taken place in order to decide on this ceiling amount? Thank you very much.
Speaker Change: What about listed group companies.
Speaker Change: Are you continuing your discussions on what to do with those holdings. Thank.
Speaker Change: Thank you very much in our case as you have mentioned.
Realized gains and losses and unrealized gains and losses are offset so it's a fact that we have sold.
Company Representative: First of all, on the IB pipeline. In Japan and some other regions, we think that there will be deals. As a backdrop, there's the requirement for governance reform.
Speaker Change: Some holdings, but we will refrain from disclosing the names in.
June the Securities report will be published so you will know that we have sold some of our holdings.
Company Representative: In other words, top management of corporates is beginning to think more seriously about governance. As a result, the funds that used to be affiliated with strategic holdings can be freed up for more strategic investment for growth. On the other hand, there could be MBOs in order to step down from the market; that kind of action is being taken by corporates, and we think that this will be a continued trend. You specifically mentioned a dense ordeal, reduction of such policy holdings, further the delisting of parent and subsidiary companies; we think that this kind of trend will continue, quarter after quarter. Will there be a constant flow of these deals? Of course, there could be uncertainties, but... Such kind of strategic holdings is estimated at 50 trillion, or 60 trillion yen. So... In order to free up those holdings, we think that we will likely see a continuation of these transactions. Secondly..., puzzle free.
Speaker Change: Our strategic holdings regarding sales.
Speaker Change: Since a few years ago.
We have been engaged very seriously.
Speaker Change: Yeah.
Speaker Change: On a regular basis, we are monitoring the purpose of those holdings and.
Speaker Change: We have been engaged in measures to reduce the amount.
Speaker Change: Yes.
Speaker Change: Major policy hasn't changed and because of the rally in the stock price the amount outstanding may have not gone down but the number of names has decreased against tier one capital ratio is currently 2.7% it's.
Speaker Change: As long as two 7% already.
Speaker Change: And this isn't the end point.
Speaker Change: We are going to reduce the number of names and we've made that commitment publicly.
Speaker Change: And I don't intend to talk about our peers, but as a financial institution in terms of sales of our strategic holdings. We are one of the financial institutions that are doing this very actively.
Speaker Change: Okay.
Speaker Change: Thank you very much.
Speaker Change: So you will continue to discuss your holdings in listed companies.
Speaker Change: Yes of course, thank you very much.
Company Representative: In fact, at the CEO Forum, we said that we think that we have a sufficient buffer and, Why at this time? We wanted to secure flexibility, as we have been saying, but strategic policy to date and in the third quarter, we were encouraged by the performance. So those are the biggest factors that we decided to do this resolution at this particular time. We are a financial institution, and we have various corporate-related information, so we cannot just arbitrarily set up such a buyback scheme. There was a window of opportunity at this time, and that's one of the reasons why we made a decision. One hundred billion yen. Is that high or low? I...
Speaker Change: The next question comes from <unk> from <unk> Securities.
Speaker Change: Thank you Imo's cocoa needs to be a securities I have two questions, but could you answer each of migration one by one.
Speaker Change: Okay.
Speaker Change: First retail division's numbers could you teach me how to understand the numbers page six and seven.
Speaker Change: In the third quarter.
Speaker Change: In page seven total sales number seems to have come down.
Speaker Change: Page six revenue has increased so there may be a <unk>.
Speaker Change: Want to know the mix so various elements there and also in page six.
Speaker Change: Plus one point to Trillium.
But netting crease of investment trust.
Company Representative: I think that it's an appropriate level. The business side hasn't used up its capital, and as mentioned by Muraki-san, there could be more. We will, however, look at business opportunities and opportunities for growth, and 100 billion yen was the level that we decided upon to strike a balance between those requirements. Thank you. Thank you very much.
Speaker Change: Sure.
Speaker Change: Page eight recurring asset net increase but.
Speaker Change: Looking at a net inflow of cash and securities I would have expected the bigger increase.
Speaker Change: But in.
Speaker Change: In the fourth quarter is going to be more net inflow for net inflows of cash and securities. That's my first question.
Speaker Change: Thank you.
Speaker Change: Total sales coming down however, and the numbers are looking a robust lies it in the third quarter.
Speaker Change: Our muni products were handled.
Speaker Change: A secondary buying activities were small but in the primary area of primary products more than offset.
Questioner (SMBC Neco Securities, Murata-san): Related to the first question, you mentioned governance, but what is Nomura's policy? This hasn't really impacted the bottom line, but the sales proceeds of the strategic holdings are there. You offset that with the unrealized losses, but you've sold many of your policy holdings, but what is the strategy? Which stocks did you sell?
Speaker Change: The weakness in the <unk>.
Speaker Change: On dairy area and the second question about the pace of increase in net inflows of cash and securities one points due to the union of increase.
Speaker Change: Of course this is not just as a result of buying activities, but the deposit of the acreage you are stock certificates. So that's involved so it's difficult to.
Company Representative: What about listed group companies? Are you continuing your discussions on what to do with those holdings? Thank you very much.
Speaker Change: And do the matching perfectly.
Speaker Change: So for example, our sales partners, who visit our clients.
Company Representative: In our case, as you have mentioned, realized gains and losses and unrealized gains and losses are offset. So it's a fact that we have sold some holdings, but we will refrain from disclosing the names. In June, the securities report will be published, so you will know that we have sold some of our holdings or strategic holdings regarding sales. Since a few years ago, we have been engaged very seriously.
Speaker Change: And to build trust.
Speaker Change: They are working on such activities, but sometimes that results in immediate buying activities, but sometimes clients asset.
Speaker Change: In the form of equity or stock certificate.
Speaker Change: We received the deposit.
Speaker Change: Both certificate.
Speaker Change: Sometimes so in that sense.
Speaker Change: There isn't the perfect linkage to buying activities by customers and regarding the recurring.
Speaker Change: Net inflow does not include it in the stock certificates. So as you say, it's difficult to see consistency among the different numbers.
Company Representative: On a regular basis, we are monitoring the purpose of those holdings and, we have been engaged in measures to reduce the amount, major policy hasn't changed and because of the rally in the stock price the amount outstanding may have not gone down but the number of names has decreased against tier one capital the ratio is currently 2.7 percent it's as low as 2.7 percent already and this isn't the end point we are going to reduce the number of names and we've made that commitment publicly, And I don't intend to talk about our peers, but as a financial institution in terms of sales of strategic holdings, we are one of the financial institutions that are doing this very actively. Thank you very much. So you will continue to discuss your holdings in listed companies. Yes, of course. Thank you very much.
Speaker Change: Okay, then qualitative question.
Okay.
Including a net inflows of cash and securities. The numbers is positive then.
Speaker Change: Moving forward. This is a tailwind for the business is it the right way to understand it well increasing their deal.
Speaker Change: Cash and securities. It is a positive thing for us.
Speaker Change: If we just received the diebold.
Speaker Change: He doesn't automatically create a revenue but this is likely to result in the next auction. So is it negative or positive it's definitely positive for us. Thank you understand my second question page 12.
Wholesales G M.
Speaker Change: The revenue.
Speaker Change: You explained.
Speaker Change: <unk> hit the bottom I understand.
Speaker Change: But the absolute level, how should I understand the absolute level.
Speaker Change: So if I EQ combined.
Speaker Change: 271 billion, it's not bad.
Speaker Change: But could you.
Comment on whether there is further room for growth in terms of outlook.
Speaker Change: Thank you.
Speaker Change: Page 12.
Speaker Change: If you look at the numbers.
Operator: The next question comes from Otsuka-san from SBI Securities. Thank you. I have two questions, but could you answer each of my questions one by one?
Speaker Change: Equities are stable, though there are ups and downs.
Speaker Change: But relatively stable.
Speaker Change: But our acreage is expected to show solid performance.
Speaker Change: The challenge is with fixed income the last one yeah.
Questioner (Otsuka-san from SBI Securities): Get. First, retail division numbers. Could you teach me how to understand the numbers on pages 6 and 7? in the third quarter?
Speaker Change: We struggled with fixed income us even though what's goes on.
Speaker Change: Our core products are limited.
Speaker Change: Especially our dependence on macro products is heavy.
Company Representative: In page 7, total sales seem to have come down, but page 6 revenue has increased. So there may be a, I want to know the mix of various elements there, and also in page 6, plus 1.2 trillion about the net increase of investment trusts or page 8, recurring asset net increase, but looking at the net inflow of cash and securities, I would have expected a bigger increase. But in the fourth quarter, is there going to be more net inflows for net inflows of cash and securities? That's my first question.
Speaker Change: And the biggest revenue driver is rates.
Speaker Change: FX.
Speaker Change: That's the way that many countries.
Speaker Change: Conducting unprecedented rates hikes.
Speaker Change: Our customer for those have been weak and.
Speaker Change: All of our positions that would be managed didn't work well as a result, we couldn't generate revenue the last one year that's from here.
Speaker Change: Of course, we.
Speaker Change: Cannot be overly optimistic about the.
Speaker Change: Interest rate hikes seem to hub peaked out already.
In that sense business environment compared to last year.
Speaker Change: Only know seems to be a favorable.
And our global market structure has been.
Company Representative: Thank you. The total sales come down. However, the numbers are looking robust. Why is that?
Speaker Change: Refresh since and the strengthened so we used to like to capture customers nice antibody.
Company Representative: In the third quarter, many products were handled. Secondary buying activities were small, but in the primary area, primary products more than offset the weakness in the secondary area. And the second question about the pace of increase in net inflows of cash and securities, 1.2 trillion yen of increase. Of course, this is not just as a result of buying activities but the deposit of equity or stock certificates, so that's involved, so it's difficult to do the matching perfectly, so, for example, our sales partners who visit our clients and build trust.
Speaker Change: May.
Speaker Change: Making them through market, making activities with like to monetize.
Speaker Change: Clients needs and you evaluate it third quarter is not that rather good.
Speaker Change: But.
Speaker Change: There is more room for us to deliver more results.
Speaker Change: Okay understand regarding fixed income.
Speaker Change: What is the outlook for Japan, it could depend on the actions by the boj, but what is your outlook for Japan.
Speaker Change: Thank you.
Speaker Change: Our firm view.
Speaker Change: Is that in April yield curve control and minus negative interest rate will be eliminated that's our view.
Speaker Change: Towards the normalization of interest rates the market, but he's been spuds are paying attention to that.
Speaker Change: And that's compared to a civil years ago. The situation is a lot more favorable.
Company Representative: They are working on such activities, but sometimes that results in immediate buying activities, but sometimes clients' assets... in the form of equity or stock certificates, we receive the deposit of the certificate. So in that sense, there isn't a perfect linkage to buying activities by customers and regarding the recurring asset net inflow that's not included in the stock certificates. So, as you say, it's difficult to see consistency among different numbers.
And people have they are anticipations or various thoughts towards the market and is not bad for us as a business environment. Okay understood. Thank you very much.
Speaker Change: The next question is by.
B of a securities <unk> and Lasalle.
Speaker Change: Yes.
B: Yeah again about bank of America I have two questions first of all.
Speaker Change: <unk> cost to income there hasn't been drastic improvement and especially in the quarter that ended overseas was a driver and.
Company Representative: Okay, then the qualitative question, including net inflows of cash and securities, the number is positive then. Moving forward, this is a tailwind for the businesses, the right way to understand it. Increasing net cash and securities is a positive thing for us. If we just received, it doesn't automatically create revenue, but this is likely to result in the next action. So, is it negative or positive?
Speaker Change: Cost control was successful.
Speaker Change: Is that sustainable in Q4, and the next fiscal year, what is the prospect regarding our compensation personnel expenses and a page 18 value at risk because this is a detailed question.
Speaker Change: Interest related V. A R is becoming smaller.
Company Representative: It's definitely positive for us. Thank you. I understand.
Based upon the change in interest rate.
Questioner (Otsuka-san from SBI Securities): My second question, page 12. Wholesales, GM. The Ribbon, you. As you explained, it hit the bottom. I understand. But the absolute level, how should I understand the absolute level?
Ecosystem.
Speaker Change: Do you have a robust system in place for risk control.
Speaker Change: Very much wholesale cost income ratio has come down quite significantly.
Company Representative: So, F-I-E-Q combined. 271 billion. It's not bad, but could you comment on whether there is further room for growth in terms of outlook? Thank you. Page 12.
Speaker Change: That is a fact as you know and at the second quarter financial results presentation, I said that even if we do a head count reduction that's not reflected immediately in the personnel expenses. The reason why in Q2.
Company Representative: If you look at the numbers, equities are stable, though there are ups and downs, but relatively stable, but equities are expected to show solid performance. The challenge is with fixed income for the last one year. We struggled with fixed income, as you know, Otsuka-san. Our core products are limited, especially our dependence on macro products is heavy. And the biggest revenue driver is rates, effects, but with many countries conducting unprecedented rate hikes. Our customer flows have been weak, all of our positions that we managed didn't work well, and as a result, we couldn't generate revenue for the last one year, but from here, Of course, we cannot be overly optimistic, but the interest rate hikes seem to have peaked out already, in that sense, the business environment compared to last year only seems And you evaluate it, the third quarter is not bad, rather good; there is more room for us to deliver more results. Okay, understand.
Speaker Change: Cost was high.
Speaker Change: There was double count in terms of head count reduction costs and salary paid to those who are still remaining and I said that the benefit will beginning to be reflected from Q3. According to my recollection.
Speaker Change: And.
Speaker Change: That impact is.
Speaker Change: Coming into play and we are constantly reviewing the head count and in Q4 and in the quarters to follow we will continue various structural reform.
Speaker Change: Measures are in place, it's gone down to 89%, but it still is a high level.
Speaker Change: So we will continue our efforts in this area.
Speaker Change: Okay.
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: Bob V a R.
Speaker Change: And generally speaking a trading position is somewhat controlled.
Speaker Change: End of December a V a R.
Same level as the.
Speaker Change: Previous quarter.
Speaker Change: We were waiting for the market environment became become more stable.
Company Representative: Regarding fixed income... What is the outlook for Japan? It could depend on the actions by the BOJ, but what is your outlook for Japan? Thank you. Our firm view is that in April, yield curve control and minus negative interest rates will be eliminated. That's our view. But towards the normalization of interest rates, market participants are paying attention to that. But compared to several years ago, the situation is a lot more favorable, and people have their anticipations of various thoughts towards the market, and that is not bad for us as a business environment. Okay, I understand.
Speaker Change: And.
Speaker Change: We want to capture business opportunities.
Speaker Change: But your question was whether we have a robust risk control assistant the answer is yes.
Speaker Change: Eight years ago.
Speaker Change: There was a little it wasn't a minor event. It was a major event, but since that event, we have been conducting corporate wide efforts to strengthen our risk management system.
Speaker Change: That's been ongoing for a few years first line of defense is second line of defense.
Speaker Change: We have put in place such robust risk control system. We have started a project to reinforce our.
Operator: Thank you very much. The next question is from B of A Securities, Yaginuma-san. Yaginobo Bank of America, I have two questions. First of all, wholesale cost to income, there has been a drastic improvement. And especially in the quarter that ended, overseas was a driver, and cost control was successful. But is that sustainable in Q4 and the next fiscal year? What is the prospect regarding compensation, personnel expenses, and page 18, value at risk? This is a detailed question.
Speaker Change: And with control and it's already a M b a U so well risk control is in place we were also.
Speaker Change: Gaming revenues. So we will continue our majors and risk control as we continue to increase our revenues. Thank you very much.
Speaker Change: Now we move to next question as we couldn't confirm your affiliation. Please state your company name and your name after hearing our music announcement.
Speaker Change: No a muted.
Speaker Change: I mean Watanabe from Daiwa Securities I have two questions.
Questioner (Yaginuma-san from B of A Securities): Interest-related VAR is becoming smaller. Based upon the change in interest rates... ecosystem. Do you have a robust system in place for risk control?
Watanabe: First page 12.
Watanabe: Fixed income monthly revenue trend in the second quarter telephone conference you Youre understanding with us.
Company Representative: Thank you very much. The wholesale cost income ratio has come down quite significantly. Yes, that is a fact, as you know.
Yeah.
Watanabe: The you are expecting a tough time, but the water restoration in the December quarter, and a spread product seems to be improving on a year on year basis. What was the reason behind it. The second question page 11 wholesale cost related question of the investment Forum. The division of course around the rate of 5.1.
Company Representative: And in the second quarter financial results presentation, I said that even if we do headcount reduction, that's not reflected immediately in the personnel expenses. The reason why the Q2 cost was high was that there was a double count in terms of headcount reduction cost and salary paid to those who are still remaining. And I said that the benefit will be getting to be reflected from Q3, according to my recollection. And that impact is coming into play, and we are constantly reviewing the headcount, and in q4 and in the quarters to follow, we will continue various structural reform measures are in place. It's gone down to 89 percent, but it still is a high level, so we will continue our efforts in this area and, V-A-R End of December V.A.R., same level as the previous quarter. We were waiting for the market environment to become more stable, and we want to capture business opportunities. But your question was whether we have a robust risk control system. The answer is yes. A few years ago...
Watanabe: <unk>, who has announced about the what's the run rate cost for the third quarter and also macro products and our outlook is improving.
Speaker Change: Is it possible for you to unchanged your outlook. So those are my two questions. Thank you.
Speaker Change: Firstly first question fixed income to monthly revenue trend.
Speaker Change: In October was a tough month.
Speaker Change: A bit more than 20% and our November and December about 40%.
Speaker Change: So.
Speaker Change: In the second quarter.
Speaker Change: Telephone conference Eyes, I said do we anticipate a struggle but.
Speaker Change: Yes, we faced a difficult situation as the numbers show.
Speaker Change: And for Us all spread products set.
Spread product is improving especially created business.
Company Representative: There was a little, it wasn't a minor event, it was a major event, but since that event, we have been conducting corporate-wide efforts to strengthen our risk management system. That's been ongoing for a few years. First line of defense, second line of defense, we have put in place such a robust risk control system. We have started a project to reinforce, Uh, risk control, and it's already in BAU. So while risk control is in place, we will also... gain revenues, so we will continue our measures and risk control as we continue to increase our revenues. Thank you very much. Now we move to the next question. As we couldn't confirm your affiliation, please state your company name and your name after hearing a muted announcement. Now, I'm muted.
Speaker Change: Continuously the spread is tightening and in this situation and the business is performing solidly.
Speaker Change: One of the revenue drivers, it's securitized products.
Speaker Change: The market has come back.
Speaker Change: And.
Speaker Change: The number of E Shula unsold bonds is.
Speaker Change: Is increasing.
Speaker Change: So finally, the market started to move, especially in December due to the increase in bond issuances.
Speaker Change: Secondary trading who has boosted.
Speaker Change: So the recovery there contributed.
Speaker Change: And.
Speaker Change: Okay.
Speaker Change: Wholesale cost.
Speaker Change: No matter, where the revenue level lies.
Speaker Change: And that's really when revenue goes up variable cost changes of Boswell.
Speaker Change: But.
Speaker Change: We are continuing with cost control.
Speaker Change: Without feeling complaisant.
Speaker Change: Okay.
Speaker Change: Through structural reform and so on we are.
Speaker Change: Operating fixed costs, while we cannot help it.
Operator: I'm Watanabe from Daiwa Securities. I have two questions. First, page 12, fixed income monthly revenue trend. In the second quarter telephone conference, your understanding was that you were expecting a tough time, but what was the situation in the December quarter? And the spread product seems to be improving on a year-on-year basis. What was the reason behind that?
Speaker Change: Increase in variable cost, but through cost control initiatives, we are looking to.
Speaker Change: Reduce cost base and that effort will continue.
Speaker Change: Thank you very much.
Speaker Change: Second question queue.
Speaker Change: Q3 cost run rate do you have a quantitative information against you with me.
Speaker Change: <unk> first question the interest rate level is high in the USA, but.
Questioner (Watanabe from Daiwa Securities): Second question, page 11, wholesale cost related question. At the investment forum, the division cost run rate of $5.1 billion was announced, but what's the run rate cost for the third quarter? And also, macro products and outlook are improving. Is it possible for you to change your outlook?
Are you seeing the return of activities.
Speaker Change: Yes, we are.
Speaker Change: Our understanding is the activities are starting to return.
Speaker Change: Overall.
Speaker Change: The last one year nugget, who us frozen so whether it is a fully fledged recovery, we're not there yet but in a sense of outlook.
Company Representative: So those are my two questions. Thank you. Firstly, first question: fixed income's monthly revenue trend, October was a tough month, a bit more than 20 percent and November, December about 40 percent. So, at the end of the second quarter at the telephone conference, I said we anticipated a struggle but yes, we faced a difficult situation, as the numbers show. As for spread products, as you said, the spread product is improving, especially the credit business. Continuously, the spread is tighten One of the revenue drivers is securitized products. The market has come back, and the number of issuance of bonds is increasing, so the market finally started to move, especially in December due to the increase in bond issuance.
Speaker Change: The outlook is getting brighter.
Speaker Change: Also.
Speaker Change: Okay.
Speaker Change: Run rate.
Speaker Change: In the third quarter.
Speaker Change: The CEO Forum, we mentioned the number but the in the sense of the run rate or is there is no change.
Speaker Change: Okay I understand thank you very much.
Speaker Change: The next question is by <unk> of Citigroup Securities. Please go ahead.
Speaker Change: Citigroup Securities.
Citigroup Securities: This is <unk> speaking can you.
Citigroup Securities: Here My voice, yes, thank you very much domestic retail and tax rate.
Citigroup Securities: For Japan retail.
Citigroup Securities: Sure.
Citigroup Securities: Activity.
Citigroup Securities: Three segments of wealth management.
Citigroup Securities: Corporate owners.
Citigroup Securities: <unk> words.
Citigroup Securities: And that's.
Citigroup Securities: Affiliate.
Citigroup Securities: Mass affluent what was.
The situation in the third quarter has there been any change and.
Citigroup Securities: What are some of the actions triggered by the new Isa scheme. That's my first question. Secondly, this is a small point, but tax rate.
Company Representative: Secondary trading was boosted, so the recovery there contributed, and wholesale cost, no matter where the revenue level lies. Naturally, when revenue goes up, variable costs change as well. We are continuing with cost control without feeling complacent, through structural reform, and so on. We are suppressing fixed costs while we cannot help increasing variable costs, but through cost control initiatives, we are looking to reduce the cost base, and that effort will continue. Thank you very much. Second question: for the Q3 course run rate, do you have quantitative information you can share with me?
All of the international regions were profitable.
I thought that it would go down according to my calculation. If this situation continues how should we interpret the tax rate applied to fall in Q4 and the quarters to follow.
Speaker Change: Thank you very much for Japan retail.
Speaker Change: Yes.
Speaker Change: We were strong in all.
Speaker Change: Areas of wealth management mass affluent high net worth.
Speaker Change: We were strong, especially we did well in high net worth.
Company Representative: And back to the first question, the interest rate level is high in the USA, but are you seeing the return of activities? Yes, we are. Our understanding is that activities are starting to return, overall. The last one year, the market was frozen, so whether it is a full-fledged recovery, we are not there yet, but in the sense of outlook, the outlook is getting brighter. Also, the wrong way, in the third quarter.
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: Since the beginning of this month.
Speaker Change: This trend has followed on.
Speaker Change: Okay.
Speaker Change: We.
Speaker Change: Allocated we assigned our partners to high net worth it so we were quite strong.
Speaker Change: Not to say that we were not as strong a mass affluent we did well in mass affluent as well but.
And then on MISO related.
Speaker Change: Business.
Operator: At the CEO forum, we mentioned this number, but in the sense of the run rate base, there is no change. Okay, I understand. Thank you very much. The next question is from Niwa-san of Citigroup Securities. Please go ahead.
Speaker Change: We are not only focusing on NESA, but.
The clients interest is.
Speaker Change: Heightened Inc.
Speaker Change: We feel that from their reaction.
Speaker Change: Using nisha.
Speaker Change: In just three weeks.
Speaker Change: Yes.
Questioner (Niwa-san from Citigroup Securities): Citigroup Security. This is Niwa speaking. Can you hear my voice?
Speaker Change: Here's one third is the progress rate in terms of.
Company Representative: Yes. Thank you very much. Domestic retail and tax rates for Japan Retail, activity, three segments, wealth management corporate owners, high net worth, and mask. Affiliate math affluent. What was the situation in the third quarter? Has there been any change?
Speaker Change: Sales so.
Speaker Change: Okay.
Speaker Change: Client sentiment.
Speaker Change: Is very warm heating up.
Speaker Change: But.
Speaker Change: Yes.
Speaker Change: Well, we will make use of NESA skiing.
Speaker Change: Our objective is our clients' increasing financial assets.
Speaker Change: That's the most important mission so portfolio allocation equity fixed income and distributed investment have long term targets as they manage their investment.
Company Representative: What are some of the actions triggered by the new NISA scheme? That's my first question. Secondly, this is a small point, but tax rates... All the international regions were profitable.
Speaker Change: And if they <unk>.
Company Representative: I thought that it would go down according to my calculation, but if this situation continues, how should we interpret the tax rate applied for q4 and the quarters to follow? Thank you very much for Japan Retail. We were strong in all areas, wealth management, mass affluent, and high net worth. We were strong, especially we did well in high net worth, and since the beginning of this month, this trend has continued. We allocated, we assigned partners to high net worth, so we were quite strong. Not to say that we were not as strong in mass affluent; we did well in mass affluent as well.
Speaker Change: Experience successes that would lead to the next business opportunity. We're not just trying to increase the number of accounts that is not our goal.
Speaker Change: $3 6 million.
Speaker Change: Is quite an amount, we hope that they make us and.
Speaker Change: Detailed tailor made consulting will be provided to our clients, which is our strength.
Speaker Change: And.
Speaker Change: Tax rate.
Speaker Change: It may appear to be high slightly.
Speaker Change: And there are a few technical factors behind which.
Speaker Change: Simultaneously occurred so if this trend.
Speaker Change: Continues the tax rate may come down slightly thank you.
Company Representative: And then on MISA-related business. We are not only focusing on NISA, but the client's interest is heightened. We feel that from their reaction to using Mesa, in just three weeks.
Okay.
I have a follow up question.
Speaker Change: Recurring asset for Japan retail.
Speaker Change: Target in March 2025.
Speaker Change: 21.6 Julien.
Company Representative: Last years, one third of the progress rate in terms of sales, so client sentiment is very warm, and heating up. But Well, we will make use of Nisha's scheme. Our objective is our clients' increasing financial assets. That's the most important mission. So portfolio allocation equity fixed income distributed investment have long-term targets as they manage their investments, and if they experience successes that would lead to the next business opportunity, we're not just trying to increase the number of accounts. That is not our goal.
Speaker Change: I believe what is your target.
Speaker Change: Have you already reached that level.
Speaker Change: Okay.
Speaker Change: Or is it because of the increasing stock price.
Speaker Change: What is <unk>.
Speaker Change: Your forecast.
Speaker Change: Thank you very much.
Speaker Change: The recurring.
Speaker Change: Revenue coverage expense coverage is 55% we want to further elevate this ratio, but in order to do that.
Speaker Change: Recurring assets outstanding will have to be increase that's not the only factor behind the recurring revenue, but it is a very important component. So we you want to further increase recurring asset at the CEO Forum, we said that it's at.
Company Representative: 3.6 million is quite an amount. We hope that they make use of it and, Detailed, tailor-made consulting will be provided to our clients, which is our strength, and, TechStreet. It may appear to be high, slightly. There are a few technical factors behind which..., simultaneously occurred.
Speaker Change: 55%, we want to raise this to 80% which means that.
Speaker Change: It is indispensable for us to increase recurring assets. Thank you.
Questioner (Niwa-san from Citigroup Securities): So if this strand continues, the tax rate may come down slightly. Thank you. I have a follow-up question. Recurring asset for Japan retail, target in March 2025. 21.6 trillion, I believe, was your target. Haven't you already reached that level?
Speaker Change: Thank you very much and that gives me more nuance. Thank you.
Speaker Change: If we have a question press shop seven.
There is no more question, we would like to finish question and answer session.
Speaker Change: Now, we would like to make the clothing address by Nomura Holdings.
Company Representative: or Is it because of the increase in stock prices? What is your forecast? Thank you very much. The recurring revenue coverage expense coverage is 55. We want to further elevate this ratio, but in order to do that, recurring asset outstanding will have to be increased. That's not the only factor behind recurring revenue, but it is a very important component, so we want to further increase recurring assets. At the CEO forum, we said that it's at 55 percent. We want to raise this to 80 percent, which means that it is Thank you very much. That gives me more nuance.
Nomura Holdings: Thank you everyone for attending the conference telephone conference and we've received various questions, but the last one year, we struggled and no wholesale is seeing a sign of recovery so towards the improvement. So we feel a real sense of improved.
Nomura Holdings: And we have capital buffer here. So this time, we've announced the buyback.
Nomura Holdings: Without a doubt.
Nomura Holdings: In the background is our confidence on the recovery of the business still 6.2% is our ROI level. So there is more work to be done.
Operator: Thank you. If you have a question, press SHOP7. As there are no more questions, we would like to finish the question and answer session. Now we would like to make the closing address by Nomula Holdings. Thank you everyone for attending the conference, the telephone conference. We've received various questions, but the last one year we have struggled, and now wholesale is seeing a sign of recovery. So towards the improvement. We feel a real sense of improvement, and we have a capital buffer here. So this time we've announced the buyback. Without a doubt, in the background is our confidence in the recovery of business.
Nomura Holdings: As a company who idea for it so we'd like to make efforts to improve our business. Thank you for your continued attention. Thank you.
Speaker Change: Thank you for taking your time and that concludes today's conference call.
Speaker Change: You may now disconnect your lines.
Speaker Change: The Macys conference.
Company Representative: Still, 6.2% is our ROE level, so there is more work to be done, as a company-wide effort, we'd like to make efforts to improve our business. Thank you for your continued attention. Thank you. Thank you for taking your time, and that concludes today's conference call. You may now disconnect your line. The Haste has...