Q4 2025 Nomura Holdings Inc Earnings Call
Speaker Change: Please be reminded that today's conference call is being recorded at the request of the hosting company. Should you help any objections, you may disconnect at this point in time.
Speaker Change: During the presentation, all the telephone lines are placed for listen only mold.
Speaker Change: The question and answer session will be held after the presentation.
Speaker Change: Please note that this telephone conference contains certain for the looking statement and other projected details which involve Nomura and Nomura's risks.
Delays, Uncertainties
Speaker Change: Coling C, Exchange Rates, Security Valuations, Competitive Conditions and Site Number and Timing of Transactions
Takumi Kitamura: With that, we would like to begin the conference. Mr. Takumi Kitamura, Chief Financial Officer, please go ahead.
Masao Muraki, Natsumu Tsujino,
Takumi Kitamura: Good evening, this is Kitamura, CFL of Nomura Hldgs. I will now give you an overview of our financial results for the fourth quarter and full year of physical year ended much.
Takumi Kitamura: 2020-25. Please stand to page 2. First of all, our full-year results, as you can see on the bottom left group net revenue increased 21% year-on-year to 1 trillion 892.5 billion while income before income tax growth grew 52% to 472 billion.
0.1 times the year.
Takumi Kitamura: Earlier level, to the record high, 340.7 billion earnings for a share came to 1-1-1.03 yen and return on equity with 10% making a strong performance. As shown on the bottom right, all three main segments perform solidly and three segment income before income taxes grew by 80% to 426.6 billion. I think it is important to highlight that earnings clearly show the fruits of our medium to long-term initiatives.
Masao Muraki, Natsumu Tsujino, Takumi Kitamura
Takumi Kitamura: Investment management saw a 20% increase in business revenue thanks to a high level of assets under management which reflected an eight consecutive quarter of net inflows, both divisions and subsidy growth in stable revenues.
Takumi Kitamura: Included four-inch of taxes rose sharply on the back of revenue growth across all divisions as well as thorough-going cost controls.
Takumi Kitamura: As a result, income before income tax is reached and 11-year high in wealth management, a 15-year high in wholesale, and the highest level at the investment management division since it was established in April 2021.
Takumi Kitamura: As you can see on the left-hand side, all divisions achieved, income before income taxes, targets for the fiscal year ended March 25 presented at May 23, investor date.
to 003.
Thank you for your time, Mr. Kitamura.
Takumi Kitamura: The lower bond of our ROE target of 8-10% or more by 2030. As you can see on the bottom right, three-segment income before income taxes totaled 90.1 billion amid uncertain market conditions. The quarter-sided decline in flow revenue in web management and lower fixed income revenues in wholesale, but stable revenues, specifically recurring revenue and business revenue, increased further and equities and investment banking, both achieved sound results.
Takumi Kitamura: Next, please turn to page 7 and I will present an overview of each business in the fourth quarter.
Thank you. Thank you. Thank you.
Transactions and Investment Trust purchases amid an uncertain market outlook.
Takumi Kitamura: Kodali earnings tend to fluctuate owing to prevailing market conditions at a given time, but on a four-year basis you can see that the division achieved revenue growth of 12% or around 49 billion yen in value terms while keeping cost increases down to a modest 1 billion yen. This can be seen as the foods of our ongoing effect to reduce costs. This can be seen as the foods of our ongoing effect to reduce costs increases down to a modest 1 billion yen.
as a result of the rush. [inaudible]
Takumi Kitamura: Enable us to achieve growth of 39% in income before income taxes. Please turn to page 8 for an update on total sales by product. Total sales?
Takumi Kitamura: Sales of stock rose 6% to 3.9 trillion in part owing to a large lot purchase. Sales of bonds increased 16% with a contribution from Toyota Motor Credit Corporation's primary deal. Secondary sales of stocks, excluding the large lot.
Thank you, Mr. Chairman.
Takumi Kitamura: In work management, priority was given to 4 KPIs in the fiscal year, net inflows of recurring revenue assets, recurring revenue assets, flow business clients and workplace services. As you can see targets were I think in
All four KPIs.
Net revenue fell owing to investment gain loss.
Takumi Kitamura: were little changed from the strong previous quarter revenue rose in the aircraft leasing business. Please join to page 11 point update on the asset management business which is a key source of business revenue.
Takumi Kitamura: About 170 billion in net inflows or into inflows to the investment trusts we mentioned earlier that investing private infrastructure company stocks and additional investment funds institutional investors in response to capital calls.
Takumi Kitamura: Net revenue rose 22% and growth in expenses was held to 10% producing income before income taxes of 3.1 times the previous year's level. Please turn to page 13 for an update on each business line. First, global markets net revenue declined 13% to 206.9 billion yen. Fixed income net revenue fell 24% to 105.8 billion yen, partly in response to a strong performance.
Takumi Kitamura: On the other hand, FX, EM and Securitized products revenues were down from the previous quarter when revenues were strong but remained firm. Equities net revenue rose for the fifth.
Takumi Kitamura: Japan Post Bank and SSA bonds, including Spanish government bonds. Next page for 15 for non-interest expenses, group-wide expenses amounted to 355 billion yen, down 2% compensation and benefits declined, 10% to 172.3 billion yen, mainly owing to a decline in bonus provisions linked to the top line. Please send to page 16 for an update on our financial position.
Takumi Kitamura: to affect the end of March, and our common equity to uncapital ratio is comfortably higher than the target we have set for ourselves of 11% over the medium term. The decision regarding today's Shia Bible class made after considering both current capital levels and the prevailing stock price levels, going forward, we intend to use our surplus capital to invest in strategically selected growth areas while also rewarding our
Speaker Change: The market environment has been turbulent and uncertain ever since the transaction revealed its reciprocal tariff policy, but it is precisely at times like this, Nomura, that Nomura Group has an especially vital role to play in April 2005. World management has seen a slowdown in net revenue as clients have retreated to the
Thank you for your continued support.
Masao Muraki, Natsumu Tsujino, Takumi Kitamura
We have a question and non-sufficient now.
If you have a question, press shop 7.
The first question.
Muraki: I have two questions. First of all, global markets.
Fixed Income
You're on your...
in comparison to the U.S. pier that seems weak.
My second question, P16.
Ball three finalization 14.5%
Muraki: Aquisition of asset management about 1.5% drop and share buyback 0.3% or slightly lower according to your plan so 12.8%
Muraki: You will probably be showing your target next month in investor day, but target range?
Muraki: You thought about set 1, 13% in deciding the share buyback program, is that the correct assumption? This is Kitamura speaking, thank you Muraki-san for your question, fixed income.
It appears to be weak.
And that's obvious, Will.
First of all, [inaudible]
Project Mix Okay.
We see comments saying that they were...
and Maka seems to be a bit weak. [inaudible]
I didn't do so well.
And Risa-mix-wise, Japan.
Muraki: In comparison to our competitors, the share or proportion is high and as you are well aware
J.B.
Muraki: was rising in Japan, and therefore challenging environment continued. So against this backdrop, unfortunately, in comparison to our peers, our performance may seem to have been weak. Regarding
January 40%
Muraki: We saw the drop of revenues in March as I have introduced, but there's mixed fees regarding a possible rate hike, and the domestic investors were on the live sidelines, and thus less liquidity.
and as far as April is concerned, generally speaking,
And on your second question...
Pick one target.
This time...
We made a decision on share by that program.
We, of course.
Muraki: took a look at various indicators, and when we do analyst meetings,
We usually talk about sit one.
Muraki: But, you're the expert, I don't intend to preach, but volatile regulation is not just about set one, there's tier one, there's capital adequacy and equity ratio, so we take a look at each of these indicators in order to decide the amount of share buyback and if you look at the capital structure of Nomura, much of it is set one.
Muraki: So, we took that into consideration and decided on the figure of $60 billion.
Masao Muraki, Masao Muraki,
So, if you could, wait for...
Sometime to come.
Thank you very much.
Muraki: On the first point, I will deviate from this performance announcement, but the capital that used to be concentrated in the US is transferring to Europe .
Speaker Change: You are doing well in US, but you are facing difficulty in Europe .
Rage Reduction, so there was tailwind for Europe .
It's so far, it's not as-
Thank you for your time.
Next question comes from Watanabe-san from Diwa Securities.
Speaker Change: Thank you. I'm Watanabe from Daiwa. I have two questions. First question is about capital policy by the book of 60 billion yen. What's the rational for that amount? And as part of that RSU portion is how much and three months ago commemorative dividend separate from usual dividend was talked about but 10% of [inaudible]
Speaker Change: 30 billion is it pure buyback and regarding the reshuffling of the business portfolio sale of Takanawa and also Makori as a management
Speaker Change: A question, so you are reshaping the portfolio, but the NRO stock and the group are stock if they are planned to make a revision to the holdings.
Thank you very much.
Speaker Change: Light 60 billion, the rationale behind the number is your question. The rationale is...
As I mentioned in my answer to Mr. Muraki,
Masao Muraki, Natsumu Tsujino,
Speaker Change: In the 60 video again, naturally RSU portion is included.
Speaker Change: So, even if we deduct that portion, more than 50% of our committed total return ratio is satisfied.
Masao Muraki, Natsumu Tsujino, Takumi
That's the answer to your question. And your second question.
A various changes to Portfolio.
Speaker Change: Includes a sale of Takanau Training Center, and as we announced this week, a position of Makori business. So dynamically, there has been changes to our portfolio.
Regarding NRI, at this point,
Speaker Change: We do not have a plan of making changes to our hoarding of staking NRI, and there are other assets that we have to pay attention to.
Speaker Change: Then 34 billion needs to be paid out for the buy back. Then that means that 26 billion or less, that's the portion for RSU's right understanding.
Speaker Change: I leave you to speculate, but you are not far off from the mark, then 49 billion were sold, but there are tax and other factors, then maybe that will be the size of contribution.
The bye-bye.
Speaker Change: So, we are exceeding PPT percent with those. Thank you very much, I understood.
Speaker Change: The next question is by Tsujino-san of BFA Securities. Thank you for taking my questions. I have three granular questions. First of all, IT. In the three months of Q4, IT expanded
Speaker Change: Phenomenon, or will this be the general level going forward? Second, Emmant A.P. in Q4, it was rather high, again increased and rather high.
Speaker Change: Last year there was a big transaction, but recently it had been calm.
Speaker Change: So, can we expect that this number will begin to come down?
And, thirdly, [inaudible]
Marj, Investment Trust Sales, was weak.
Lack of performance, and one more point of confirmation.
Speaker Change: You said April has been at the average of 4Q. Is that the total for the global market? That's all for me.
Speaker Change: Half of the third quarter had been injected into Q4 bookings, so will this level continue? No, we don't think so. I hope I answered the first question and your second question.
and the day.
Masao Muraki, Natsumu Tsujino, Takumi Kitamura
As you know, corporate governance.
Masao Muraki, Natsumu Tsujino,
Japanese
Speaker Change: Most recently, I think we need to be cautious and we will be monitoring the situation closely.
Speaker Change: And as I said in my presentation, the FX rate 143 yen to the dollar is probably the current level. It went down to 160 yen to the dollar, so for Japanese businesses.
It'd be a while.
There could be positive factors from such perspective. And also...
Speaker Change: Shifting production to the US in this more in the US market. Those are some of the things that the businesses are talking about so.
Speaker Change: Stay calm and observe, and the pipeline oversees is not so bad, but again, stop price.
It seems to be uncertain, so ...
And...
First of all, in February , [inaudible]
Diel to play, so...
New Investment Trust
has not been launched.
Rez.
very little visibility in the market so
Amidst
Speaker Change: All the more so because we're in difficult times, I think the partnership should be leveraged.
Speaker Change: and also because of this environment rather than trying to sell something to our clients, I think it's time to listen to the challenges that our clients are facing.
You may feel that the numbers are rather...
Poor, but we are not pessimistic at all.
and on your final point.
April
Well, basically...
Q4
Speaker Change: Aepo has been following the pattern of Q4, slightly weakened fixed income while equity did well, and that trend remained unchanged, and I think that's the general trend in the GM as a whole. Thank you very much.
Speaker Change: The next question comes from Sato-san of JP Morgan Securities.
Sato Sano: Thank you. I'm Sato from JP Movan Securities. I have two questions. First question.
Inepio.
The market had high volatility.
Sato Sano: Impact on Flow was explained in many ways, but for example...
Speaker Change: What about the risk of certain lost counterparty, alone position related loss?
Speaker Change: My hope is that you would comment that you are not expecting anything significant in impact. Second point is regarding cost income ratio of wholesale, how do you evaluate that throughout the year you explained your evaluation.
Speaker Change: But looking back on the movement over the last several quarters, in good way or bad, the top line.
The progress has had impact on the cost-income ratio.
Moving forward.
At the level of
Speaker Change: If the top line is at the level of the fourth quarter.
Then...
Would it be possible to achieve 80% of course in commercial?
Speaker Change: So, especially in the second, third and fourth quarters, looking at the progress of course income ratios and what is your evaluation and also could you comment on your future outlook. Thank you.
Thank you, Sado-san for your questions.
Speaker Change: We've been looking at the market trend and we have been taking quite a risk of positions.
We have been tightly managing risks.
From here...
Created spread is widening, so that calls for our caution.
Recently
Speaker Change: We do not feel impact that have major impact on our positions but we will have to pay close attention to the progress from here.
Speaker Change: It's not just us, but this entire finance industry will have to pay close attention, but as mentioned earlier
Masao Muraki, Natsumu Tsujino,
Speaker Change: We are being quite cautious, so we do not have calls for concern at this point in time. Regarding the calls in commercial.
Masao Muraki, Natsumu Tsujino, Takumi Kitamura,
It went to 86%, so I'll do you point it out.
There's still room for us to control cost income ratio.
Especially...
Speaker Change: For this time, Ko's income ratio looks high, that's because equity's execution made a progress revenue grew, but this business...
Hi, Kostso.
cost ratio
Speaker Change: Start taking effect on financial statements. In the welcome management, we took some measures and we see the effect in the P&L, but regarding the initiatives in the wholesale division, we are working on various transformation initiatives, and it will take some time before we start to see the effect. Thank you very much.
Thank you, I understood. Thank you.
Bitty Group Security, Niwa-san, please go ahead.
Niwa: This is Niwa Otsuki speaking. I have two questions. Value at risk and risk asset and the use.
First.
This was already replied to, there's overlap at the base 19.
Much numbers were quite low.
Speaker Change: So, you said you were already in risk of mode, but was this a result of intentional control or was it due to the market?
What was the judgment that led to this operation?
Masao Muraki, Natsumu Tsujino, Takumi
We announce the truth.
Ear Result, and we looked at the market.
Speaker Change: We had to announce the full years of and we were rather subdued. What about the situation at our competitors? We haven't been...
Speaker Change: So, monitoring so closely, for them, it was Q1, so they must have been more aggressive, but that's only my imagination.
We're always debating on various options.
And nothing has been decided, and that's a true thought.
Speaker Change: Most recently we had been spending much time debating on that deal. Business wise,
Speaker Change: If they are to do new business, they would do that by-
Switching the portfolio.
Speaker Change: On the other hand, the most recent announcement regarding the acquisition of the effort management business.
It's about public, it's a public company and...
Speaker Change: Some of the people gave us comments saying that I thought you'd be acquiring private business, but by having a strong...
Speaker Change: We're not saying we won't be using risk assets, to a certain extent we will be using risk assets.
Speaker Change: So, if we discover such opportunity in the future, we will be using risk assets.
Thank you very much. We'll understand. Thank you.
Thank you.
Otsuka: Can you hear me? I am Otsuka from SBI Securities. Yes.
I have two questions.
Page 7. First question is about the World of Modagement.
Otsuka: The flow revenue, I have a question about flow revenue and so on. The looking at the most recent numbers, based on the situation in April , what is the level of flow revenue? Is it at the same level as the fourth quarter when you look at the April ?
Otsuka: or is there going to be some slowdown, even the qualitative explanation helps. That's my first question. Thank you very much regarding growth management.
Otsuka: Now, I did not have numbers here, but looking at the quota in the third quota, third quota was the toughest quota for us.
The situation is not that severe as in much.
It's similar to Fort Quarter.
are increasing that time.
Otsuka: To have dialogue with clients and in a market condition like this, it is a good opportunity for us to listen to what customers have to say about their concerns and customers have more and more concerns.
Otsuka: By spending enough time with customers, eventually our efforts will pay off later. Thank you. Next question, page 2 is about page 10, investment management division.
Speaker Change: The other day, you made an announcement about Makori Acquisition, but after the Acquisition, a new initiative, not investment, but...
Are you going to focus on business revenue? Yes.
Speaker Change: And another question, okay? Okay, thank you very much. Another question regarding American Century. In the fourth quarter, there was weakness, but and recently, investment gained lost American Century. Can we assume American Century continued to struggle?
So, you are a question? So...
The ACI
Indeed.
Speaker Change: There's impact of market and there's volatility for us in order to mitigate volatility we have hedge in place. So, in the fourth quarter...
Our hitch took effect.
soul
Masao Muraki, Natsumu Tsujino, Takumi Kitamura,
Speaker Change: Even if ACI performance goes up or down, we have hedge.
Masao Muraki, Natsumu Tsujino
Speaker Change: ACI evaluation. What is going to be the trend or end result in the first quarter, we cannot tell at this point about what we aim to achieve is to hold down or suppress volatility. Understood?
Speaker Change: You are a hedge position. You have more hedge position than before. So investment, gain, loss.
Impact
Speaker Change: which used to be big in some quarters, but you won't be able to, you will not be able to recognize such outside loss as in the past.
Speaker Change: Regarding the ACI evaluation, some market factors are suppressed with hedging, so in that sense, volatility will be less than before. On the other hand, within ACI, there is some parameter that could move. That...
Speaker Change: Volatility, we cannot guarantee that volatility comes to zero completely. Okay, my understanding has been clarified. Thank you.
Masao Muraki, Natsumu Tsujino, Takumi Kitamura
If you have a question, press Sharp 7.
The next question is by Bloomberg Intelligence Bansao
Masao Muraki, Natsumu Tsujino,
I have two simple questions.
What management?
According to your presentation, net increase of
Incompletion to the first half.
Speaker Change: of the quarter. In the second half, there was market movement that you said that 4Q was difficult, but Q3 was the bottom in terms of acquired acid, so my point is...
In the second half of the year that ended,
Stock Asit [inaudible]
Trent, 80 Billion KPI [inaudible]
From the run rate...
Speaker Change: was last year's performance rather strong. It's rather abstract, but that's my question. And the second question is regarding details.
60-billion buyback.
Speaker Change: Ratio, you said that was in your mind, Ikuri Ratio.
You
Speaker Change: If that's not included in shareholder return, then for next fiscal year that would be included in shareholder return.
Thank you for your time, Mr. Kitamura.
Speaker Change: But what we want you to focus is the red portion.
which includes corporates.
and there's quite...
Thank you.
Gain and loss and you see that the level has been high and true that Q3 was low but Q4 was at a high level.
Speaker Change: It was Q3 the bottom, it's difficult to say but if we look at the plunge in the market most recently
Wolf Management Witches are core, and PWM.
In these areas...
Speaker Change: by outperformed sales and recurring asset increased on net basis. So we see robustness.
Takanawa Procease, Takanawa Procease.
Masao Muraki, Natsumu Tsujino
Speaker Change: Is recognizing Q1 and when we decided the shareholder return for last fiscal year, which was announced today, this was not included. Takanau was not included. Thank you very much for answering my questions.
Speaker Change: If you have some more questions, please ask our Nomura Hldgs IR department.
Speaker Change: In the end, we would like to make closing address by Nomura Hldgs.
Thank you for attending.
As I said at the beginning, our initiatives are finally...
Speaker Change: Mati Realizing our numbers and on a full basis, it was a strong performance. Profit was at record high and for four quarters in a row, 8% target was exceeded.
That shows the stability of our performance.
Since April [inaudible]
Speaker Change: We have announced the acquisition of Makori asset and we are implementing various initiatives. So, in order to stabilize business, we are doing what we can, everything we can do. On the other hand, market environment is quite...
Speaker Change: Sylvia in challenging, so I received a question about wholesale but cost control and the business process transformation still.
Speaker Change: Halfway, at this halfway point, so just because the performance was strong this time we would continue working on our initiatives.
Masao Muraki, Natsumu Tsujino,
Speaker Change: Thank you for taking your time, and that concludes today's conference call.
The host has placed his conference on hold.