Q2 2026 Nomura Holdings Inc Earnings Call

Speaker #1: Please be reminded that today's conference call is being recorded. At the request of the hosting company, should you have any objections, you may disconnect.

Speaker #1: At this point in time . During the presentation , all the telephone lines are placed for listen only mode . The question and answer session will be held after the presentation .

Speaker #1: Please note that this telephone conference contains certain forward looking statements and other projected results , which involve known and unknown risks , delays in certainties and other factors not under the company's control , which may cause actual results , performance or achievements of the company to be materially different from the results , performance or other expectations implied by these projections .

Speaker #1: Such factors include economic and market conditions , political events and investor sentiments , liquidity of secondary markets level and volatility of interest rates , currency exchange rates , security evaluations , competitive conditions , and size .

Operator: Such factors include economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions, and size, number, and timing of transactions. With that, we'd like to begin the conference. Mr. Hiroyuki Moriuchi, Chief Financial Officer, please go ahead.

Operator: Such factors include economic and market conditions, political events, and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions, and size, number, and timing of transactions. With that, we'd like to begin the conference. Mr. Hiroyuki Moriuchi, Chief Financial Officer, please go ahead.

Speaker #1: Number and timing of transactions . We thought we would like to begin the conference . Mr. . Hiroyuki Moriuchi , Chief Financial Officer please go ahead .

Speaker #2: Thank you very much. This is Moriuchi, CFO. I will now give you an overview of our financial results for the second quarter of the fiscal year ending March 2026.

Hiroyuki Moriuchi: Thank you very much. This is Hiroyuki Moriuchi, CFO. I will now give you an overview of our financial results for the second quarter of the fiscal year ending March 2026. Please turn to page 2. Group-wide net revenue came in at ¥515.5 billion, down 2% from last quarter. Income before income taxes fell 15% to ¥136.6 billion, while net income was ¥92.1 billion, down 12%. Excluding gains from the sale of real estate recorded in the previous quarter, net revenue was up 10% and net income was up 40%. Reflecting steady growth, earnings per share for the quarter were ¥30.49 and return on equity was 10.6%, reaching the quantitative target for 2030 of 8% to 10% or more for the sixth consecutive quarter.

Hiroyuki Moriuchi: Thank you very much. This is Moriuchi, CFO. I will now give you an overview of our financial results for Q2 of the fiscal year ending March 2026. Please turn to page 2. Group-wide net revenue came in at JPY 515.5 billion, down 2% from last quarter. Income before income taxes fell 15% to JPY 136.6 billion, while net income was JPY 92.1 billion, down 12%. Excluding gains from the sale of real estate recorded in the previous quarter, net revenue was up 10% and net income was up 40%, reflecting steady growth.

Speaker #2: Please turn to page two . Group wide net revenue came in at ¥515.5 billion , down 2% from last quarter . Income before income taxes fell 15% to ¥136.6 billion , while net income was ¥92.1 billion , down 12% .

Speaker #2: Excluding gains from the sale of real estate recorded in the previous quarter . Net revenue was up 10% and net income was up 40% , reflecting steady growth earnings per share for the quarter were ¥30.49 , and return on equity was 10.6% , reaching the quantitative target for 2030 of 8 to 10% or more for the sixth consecutive quarter .

Hiroyuki Moriuchi: EPS for the quarter were JPY 30.49, and ROE was 10.6%, reaching the quantitative target for 2030 of 8% to 10% or more for the 6th consecutive quarter. In addition, income before income taxes in the 3 international regions rose 63% to JPY 44.9 billion, marking the 9th consecutive quarter of profitability. For all 4 divisions in total, income before income taxes rose 25% to JPY 132.6 billion. In wealth management, the balance of recurring revenue assets and recurring revenue saw a net inflow for the 14th consecutive quarter, reaching an all-time high. In investment management, assets under management also reached an all-time high on a 10th consecutive quarter of net inflows. Revenues and profits rose in both divisions.

Speaker #2: In addition, income before income taxes in the three international regions rose 63% to ¥44.9 billion, marking the ninth consecutive quarter of profitability for all four divisions in total income.

Hiroyuki Moriuchi: In addition, income before income taxes in the three international regions rose 63% to ¥44.9 billion, marking the ninth consecutive quarter of profitability for all four divisions. In total, income before income taxes rose 25% to ¥132.6 billion. In wealth management, the balance of recurring revenue assets and recurring revenue saw net inflow for the 14th consecutive quarter, reaching an all-time high. In investment management, assets under management also reached an all-time high on a tenth consecutive quarter of net inflows. Revenues and profits rose in both divisions. In wholesale, the overall trend of growth in both revenue and profits strengthened further, with net revenue in equities reaching a record high in global markets. Momentum remains strong in investment banking too. The banking division established in April also performed well.

Speaker #2: Before income taxes rose 25% to ¥132.6 billion . In wealth management , the balance of recurring revenue assets and recurring revenue saw a net inflow for the 14th consecutive quarter , reaching an all time high and in investment management assets under management also reached an all time high on a 10th consecutive quarter of net inflows .

Speaker #2: Revenues and profits rose in both divisions in wholesale , the overall trend of growth in both revenue and profits strengthened further , with net revenue in equities reaching a record high in global markets , and momentum remains strong in investment banking to .

Hiroyuki Moriuchi: In wholesale, the overall trend of growth in both revenue and profits strengthened further with net revenue in equities reaching a record high in Global Markets, and momentum remained strong in investment banking too. The banking division, established in April, also performed well. Before we go into details for each business, let us first take a look at the performance in the H1 of the fiscal year. Please turn to page 3. As shown on the bottom left, income before income taxes rose 26% year-on-year to JPY 296.9 billion. Net income rose 18% to JPY 196.6 billion. Earnings per share came in at JPY 64.53. Return on equity rose to 11.3% as medium to long-term initiatives steadily bore fruit.

Speaker #2: The banking division, established in April, also performed well. Before we go into details for each business, let us first take a look at the performance in the first half of the fiscal year.

Hiroyuki Moriuchi: Before we go into details for each business, let us first take a look at the performance in the first half of the fiscal year. Please turn to page 3. As shown on the bottom left, income before income taxes rose 26% year on year to ¥296.9 billion. Net income rose 18% to ¥196.6 billion and earnings per share came in at ¥64. Return on equity rose to 11.3% as medium to long-term initiatives steadily bore fruit. In addition, group revenue rose by 11% and profits benefited from cost controls and operating leverage with a cost coverage ratio of 71%. Please see the bottom right for a breakdown of income before income taxes. Income before income taxes at the four main divisions rose 11% to ¥238.4 billion.

Speaker #2: Please turn to page three. As shown on the bottom left, income before income taxes rose 26% year on year to ¥296.9 billion.

Speaker #2: Net income rose 18% to ¥196.6 billion, and earnings per share came in at ¥64.53. Return on equity rose to 11.3% as medium- to long-term initiatives steadily bore fruit.

Speaker #2: In addition , group revenue rose by 11% and profits benefited from cost controls and operating leverage , with a cost leverage , cost coverage ratio of 71% .

Hiroyuki Moriuchi: In addition, group revenue rose by 11% and profits benefited from cost controls and operating leverage with a cost coverage ratio of 71%. Please see the bottom right for a breakdown of income before income taxes. Income before income taxes at the 4 main divisions rose 11% to JPY 238.4 billion. Growth in recurring business revenue in wealth management and investment management helped to stabilize overall performance, and wholesale continued its self-sustained growth based on the principle of self-funding, enabling income before income taxes to rise substantially, thereby driving overall performance. Banking got off to a good start and has made progress with preparations for the introduction of a deposit sweep service next fiscal year. In view of this performance, for the period ended September 2025, we expect to pay a dividend of JPY 27 per share.

Speaker #2: Please see the bottom right for a breakdown of income before income taxes. Income before income taxes at the four main divisions rose 11% to ¥238.4 billion.

Speaker #2: Growth in recurring business revenue and wealth management, along with investment management, helped to stabilize overall performance. Wholesale continued its self-sustained growth based on the principle of self-funding, enabling income before income taxes to rise substantially, thereby driving overall performance.

Hiroyuki Moriuchi: Growth in recurring business revenue in wealth management and investment management helped to stabilize overall performance, and wholesale continued its self-sustained growth based on the principle of self-funding, enabling income before income taxes to rise substantially, thereby driving overall performance. Banking got off to a good start and has made progress with preparations for the introduction of a deposit sweep service next fiscal year. In view of this performance for the period ended September 2025, we expect to pay a dividend of ¥27 per share. This works out at a dividend payout ratio of 40.3%. Please turn to page 4. This time we have added this slide to our presentation. We calculate stable revenues as the sum of recurring revenue at wealth management, business revenue at investment management, and revenue at banking.

Speaker #2: Banking got off to a good start and has made progress with preparations for the introduction of a deposit sweep service next fiscal year.

Speaker #2: In view of this performance for the period ended September 2025, we expect to pay a dividend of ¥27 per share. This works out to a dividend payout ratio of 40.3%.

Hiroyuki Moriuchi: This works out at a dividend payout ratio of 40.3%. Please turn to page 4. This time we have added this slide to our presentation. We calculate stable revenues as the sum of recurring revenue at Wealth Management, business revenue at Investment Management, and revenue at Banking. Steady growth in recurring assets in both Wealth Management and Investment Management, shown on the left, has resulted in strong growth in stable revenues, as shown in the graph on the right. Banking has been steadily increasing its recurring business, including loans outstanding and trust balance, thereby expanding its foundation for growth. Now, we will look at the Q2 results for each division. Please turn to page 7. All percentages discussed from now on are based on a quarter-on-quarter comparison.

Speaker #2: Please turn to page four. This time, we have added this slide to our presentation. We calculate stable revenues as the sum of recurring revenue at Wealth Management, business revenue at Investment Management, and revenue at Banking.

Speaker #2: Steady growth in recurring assets in both wealth management and investment management, shown on the left, has resulted in strong growth in stable revenues, as shown in the graph on the right.

Hiroyuki Moriuchi: Steady growth in recurring assets in both wealth management and investment management, shown on the left, has resulted in strong growth in stable revenues as shown in the graph on the right. Banking has been steadily increasing its recurring business, including loans outstanding and trust balance, thereby expanding its foundation for growth. Now we will look at the second quarter results for each division. Please turn to page 7. All percentages discussed from now on are based on a quarter-on-quarter comparison. Wealth management net revenue increased 10% to ¥116.5 billion, and income before income taxes grew 17% to ¥45.5 billion. Income before income taxes was the highest in about 10 years since the quarter ended June 2020.

Speaker #2: And banking has been steadily increasing its recurring business, including loans outstanding and trust balance, thereby expanding its foundation for growth. Now we will look at the second quarter results for each division.

Speaker #2: Please turn to page seven . All percentages discussed from now on are based on a quarter on quarter comparison . Wealth management . Net revenue increased 10% to ¥116.5 billion , and income before income taxes grew 17% to ¥45.5 billion .

Hiroyuki Moriuchi: Wealth management net revenue increased 10% to JPY 116.5 billion, and income before income taxes grew 17% to JPY 45.5 billion. Income before income taxes was the highest in about 10 years since the Q2 ended June 2015. Recurring revenue and the balance of recurring revenue assets both reached record highs as recurring revenue assets saw a net inflow for the 14th consecutive quarter. As major equity markets rose to fresh highs during the quarter, client activity increased and flow revenue registered strong growth. Meanwhile, the pre-tax profit margin reached a high level of 39%, buoyed by ongoing cost controls. The recurring revenue cost coverage ratio for the last 4 quarters came to 70%, leading additional stability to the division's performance. Please turn to page 8, where you can see an update on total sales by product.

Speaker #2: Income before income taxes was the highest in about ten years. Since the quarter ended June 2015, recurring revenue and the balance of recurring revenue assets both reached record highs, as recurring revenue assets saw a net inflow for the 14th consecutive quarter.

[Company Representative]: 2015.

Hiroyuki Moriuchi: Recurring revenue and the balance of recurring revenue assets both reached record highs as recurring revenue assets saw a net inflow for the 14th consecutive quarter. As major equity markets rose to fresh highs during the quarter, client activity increased and flow revenue registered strong growth. Meanwhile, the pre-tax profit margin reached a high level of 39%, buoyed by ongoing cost controls. The recurring revenue cost coverage ratio for the last four quarters came to 70%, lending additional stability to the division's performance. Please turn to page eight where you can see an update on total sales by product. Total sales declined around ¥300 billion to ¥6.4 trillion, but this was owing to a tender offer in excess of ¥1 trillion during the previous quarter. As for recurring revenue assets, sales of investment trusts and discretionary investments grew steadily, supported by continued strong demand for long-term investment diversification.

Speaker #2: As major equity markets rose to fresh highs during the quarter . Client activity increased and flow revenue registered strong growth . Meanwhile , the pre-tax profit margin reached the high level of 39% , buoyed by ongoing cost controls .

Speaker #2: The recurring revenue cost coverage ratio for the last four quarters came to 70%, leading additional stability to the division's performance. Please turn to page eight, where you can see an update on total sales by product.

Speaker #2: Total sales declined by around ¥300 billion to ¥6.4 trillion, but this was owing to a tender offer in excess of ¥1 trillion during the previous quarter.

Hiroyuki Moriuchi: Total sales declined around JPY 300 billion to JPY 6.4 trillion, but this was owing to a tender offer in excess of JPY 1 trillion during the previous quarter. As for recurring revenue assets, sales of investment trusts and discretionary investments grew steadily, supported by continued strong demand for long-term investment diversification. Regarding insurance, sales have continued at a high level, reflecting the relatively high US interest rate environment. Next, let's take a look at the KPIs on page 9. On the top left, you can see that recurring revenue assets saw a net inflow of JPY 289.5 billion. As major markets reached new highs, net inflows remained at a high level despite increased selling pressure from portfolio adjustments as our efforts to expand the recurring business proved successful, taking us to the next stage.

Speaker #2: As for recurring revenue assets, sales of investment trusts and discretionary investments grew steadily, supported by continued strong demand for long-term investment diversification.

Speaker #2: Regarding insurance , sales have continued at a high level , reflecting the relatively high US interest rate environment . Next , let's take a look at the KPIs on page nine .

Hiroyuki Moriuchi: Regarding insurance, sales have continued at a high level, reflecting the relatively high U.S. interest rate environment. Next, let's take a look at the KPIs on page 9. On the top left, you can see that recurring revenue assets saw a net inflow of ¥289.5 billion as major markets reached new highs. Net inflows remained at a high level despite increased selling pressure from portfolio adjustments as our efforts to expand the recurring business proved successful, taking us to the next stage. Meanwhile, as shown on the top right, recurring revenue assets totaled ¥26.2 trillion at the end of September and recurring revenue exceeded ¥50 billion for the first time in our quarterly results, owing to a contribution from investment fees which are collected on a half-yearly basis. In the second quarter, as shown on the bottom right, the number of workplace services rose steadily to exceed 4 million.

Speaker #2: On the top left, you can see that recurring revenue assets saw a net inflow of ¥289.5 billion, as major markets reached new highs. Net inflows remained at a high level despite increased selling pressure from portfolio adjustments.

Speaker #2: As our efforts to expand the recurring business proved successful , taking us to the next stage . Meanwhile , as shown on the top right , recurring revenue assets totaled ¥26.2 trillion at the end of September and recurring revenue exceeded ¥50 billion for the first time in our quarterly results .

Hiroyuki Moriuchi: Meanwhile, as shown on the top right, recurring revenue assets totaled JPY 26.2 trillion at the end of September, and recurring revenue exceeded JPY 50 billion for the first time in our quarterly results. Owing to a contribution from investment fees, which are collected on a half-yearly basis in Q2. As shown on the bottom right, the number of workplace services rose steadily to exceed 4 million. Next, let's take a look at the investment management. Please turn to page 10. Net revenue came to JPY 60.8 billion, up 20%. Income before income taxes amounted to JPY 30.7 billion, up 43%. Stable business revenue has been growing steadily. In addition to favorable market factors, 10 straight quarters of net inflows resulted in assets under management topping JPY 100 trillion and asset management fees reaching a new high.

Speaker #2: Owing to a contribution from investment fees, which are collected on a half-yearly basis in the second quarter, as shown in the bottom right, the number of workplace services rose steadily to exceed 4 million.

Speaker #2: Next , let's take a look at investment management . Please turn to page ten . Net revenue came to ¥60.8 billion , up 20% .

Hiroyuki Moriuchi: Next, let's take a look at investment management. Please turn to page 10. Net revenue came to ¥60.8 billion, up 20%. Income before income taxes amounted to ¥30.7 billion, up 43%. Stable business revenue has been growing steadily in addition to favorable market factors. Ten straight quarters of net inflows resulted in assets under management topping ¥100 trillion and asset management fees reaching a new high. Investment gain/loss came to ¥16.8 billion, rising sharply by 69%. This reflects not only a large increase in investment gain loss related to American Century Investments, but also profits recorded at private equity investment firm Mura Capital Partners on the sale of shares held in Orium Breweries, which publicly listed. Let's now turn to page 11 and examine our asset management business, which is the key source of business revenue for the division.

Speaker #2: Income before income taxes amounted to ¥30.7 billion, up 43%. Stable business revenue has been growing steadily, in addition to favorable market factors.

Speaker #2: Ten straight quarters of net inflows resulted in assets under management topping ¥100 trillion and asset management fees reaching a new high. Investment gains.

Hiroyuki Moriuchi: Investment gain/loss came to JPY 16.8 billion, rising sharply by 69%. This reflects not only a large increase in investment gain/loss related to American Century Investments, but also profits recorded at private equity investment firm Nomura Capital Partners on the sale of shares held in Orion Breweries, which publicly listed. Let's now turn to page 11 and examine our asset management business, which is the key source of business revenue for the division. The graph on the upper left shows that assets under management reached JPY 101.2 trillion at the end of September. As shown on the bottom left, net inflows amounted to JPY 498 billion. Net inflows to the investment trust business totaled around JPY 525 billion, and net outflows from the investment advisory and international businesses were around JPY 26 billion.

Speaker #2: Loss came to ¥16.8 billion, rising sharply by 69%. This reflects not only a large increase in investment gain and loss related to American Century Investments, but also profits recorded at private equity investment firm Nomura Capital Partners.

Speaker #2: On the sale of shares held in Orion Breweries, which is publicly listed. Let's now turn to page 11 and examine our asset management business, which is the key source of business revenue for the division.

Speaker #2: The graph on the upper left shows that assets under management reached ¥101.2 trillion at the end of September. As shown on the bottom left, net inflows amounted to ¥498 billion.

Hiroyuki Moriuchi: The graph on the upper left shows that assets under management reached ¥101.2 trillion at the end of September. As shown on the bottom left, net inflows amounted to ¥498 billion. Net inflows to the investment trust business totaled around ¥525 billion, and net outflows from the investment advisory and international businesses were around ¥26 billion. Net inflows in the investment trust business were achieved despite share price increases on the major markets triggering profit-taking sales, pushing up funds kept in reserve in MRFs. Even excluding MRFs, funds flowed into Japan equity ETFs, private assets, and balanced funds. The investment advisory and international businesses saw net outflows owing to reshuffling of investments by Japanese investors and outflows from Asian equities, which outweighed inflows to U.S. High Yield Bonds and UCITS investment funds.

Speaker #2: Net inflows to the investment trust business totaled around ¥525 billion, while net outflows from the investment advisory and international businesses were around ¥26 billion.

Speaker #2: Net inflows in the investment trust business were achieved despite share price increases in the major markets, triggering profit-taking sales and pushing up funds kept in reserve in MRFS.

Hiroyuki Moriuchi: Net inflows in the investment trust business were achieved despite share price increases on the major markets, triggering profit-taking sales, pushing up funds kept in reserve in MRFs. Even excluding MRFs, funds flowed into Japan equity ETFs, private assets, and balanced funds. The investment advisory and international businesses saw net outflows owing to reshuffling of investments by Japanese investors and outflows from Asian equities, which outweighed inflows to US high-yield bonds and UCITS investment funds. As shown in the graph at the bottom right, alternative assets under management rose to a new high of JPY 2.9 trillion. This performance is the result of solid net inflows and not solely owing to market factors.

Speaker #2: But even excluding Mrfs , funds flowed into Japan . Equity ETFs , private assets and balanced funds . The investment advisory and international businesses saw net outflows owing to reshuffling of investments by Japanese investors and outflows from Asian equities , which outweighed inflows to US high yield bonds and Ucits investment funds .

Speaker #2: As shown in the graph at the bottom right, alternative assets under management rose to a new high of ¥2.9 trillion. This performance is the result of solid net inflows and not solely due to market factors.

Hiroyuki Moriuchi: As shown in the graph at the bottom right, alternative assets under management rose to a new high of ¥2.9 trillion. This performance is the result of solid net inflows and not solely owing to market factors.

Speaker #1: Next .

[Company Representative] (Nomura Holdings): Wholesale division, please go to page 12. Net revenue came to JPY 279.2 billion, up 7%. As shown at the bottom left of the slide, Global Markets net revenue was up 6%, and Investment Banking net revenue was up 15%. Stringent cost management resulted in division expenses only rising 3%. Cost income ratio improved to 81%, and income before income taxes rose 27% to JPY 53.1 billion. Please turn to page 13 for an update on each business line. Net revenue in Global Markets business rose 6% to JPY 235.7 billion. Fixed income revenue was JPY 121.9 billion, in line with the previous quarter. Let's look at product breakdown.

Speaker #3: Wholesale division, please go to page 12. Net revenue came to ¥279.2 billion, up 7%, as shown at the bottom left of the slide.

[Company Representative]: Next, Wholesale division, please go to page 12. Net revenue came to ¥279.2 billion, up 7%. As shown at the bottom left of the slide, Global Markets net revenue was up 6% and investment banking net revenue was up 15%. Meanwhile, stringent cost management resulted in division expenses only rising 3%. As a result, cost income ratio improved to 81% and income before income tax rose 27% to ¥53.1 billion. Please turn to page 13 for an update on each business line. Net revenue in Global Markets business rose 6% to ¥235.7 billion. Fixed income revenue was ¥121.9 billion, in line with the previous quarter. Let's look at product breakdown. In Macro Products, rates revenues were down quarter on quarter in EMEA and FXEM. Revenues in AEJ were also down. In spread products, credit revenue growth in Japan and EEJ was attained by capturing client flows and securitized products.

Speaker #3: Global markets net revenue was up 6%, and the investment banking net revenue was up 15%. Meanwhile, stringent cost management resulted in dividend expenses only rising 3%.

Speaker #3: As a result, the cost-income ratio improved to 81%, and income before income taxes rose 27% to ¥53.1 billion. Please turn to page 13 for an update on each business line.

Speaker #3: Net revenue in the global markets business rose 6% to ¥235.7 billion. Fixed income revenue was ¥121.9 billion, in line with the previous quarter.

Speaker #3: Let's look at the product breakdown in macro products rates. Revenues were down quarter on quarter in EMEA. FX revenues in EEG were also down in spread products.

[Company Representative] (Nomura Holdings): In macro products, rates revenues were down quarter-on-quarter in EMEA. FXEM revenues in AEJ were also down. In spread products, credit revenue growth in Japan and AEJ was attained by capturing client flows, and securitized products revenue growth was supported in the Americas by the prevailing direction of the interest rate environment. As a result, higher revenue from spread products offset lower revenues from macro products. Equities revenue rose 16% to a new high of JPY 113.8 billion. In equity products, revenues grew on higher client activity in Japan and AEJ, supporting a strong performance in the derivative business, and Americas business remained favorable. If execution services sustained strong revenue from the previous quarter. Please turn to page 14. Investment Banking net revenue rose 15% to JPY 43.5 billion.

Speaker #3: Credit revenue growth in Japan and Asia was attained by capturing client flows and securitized products. Revenue growth was supported in the Americas by the prevailing direction of the environment.

[Company Representative]: Revenue growth was supported in the Americas by the prevailing direction of the interest rate environment. As a result, higher revenue from spread products offset lower revenues for Macro Products. Equities revenue rose 16% to a new high of ¥113.8 billion. In equity products, revenues grew on higher client activity in Japan and AEJ, supporting a strong performance in the derivatives business, and the Americas business remained favorable. Execution Services sustained strong revenue from the previous quarter. Please turn to page 14. Investment banking net revenue rose 15% to ¥43.5 billion. Corporate action in Japan remained consistently strong and the international business also contributed to revenue growth. By product, in advisory, momentum remained strong in Japan with multiple transactions involving financial sponsors and moves to take companies private, and international business also made a contribution with a mandate deal related to renewable energy and digital infrastructure, primarily in EMEA.

Speaker #3: As a result, higher revenue from spread products offset lower revenues from macro products. Equities revenue rose 16% to a new high of ¥113.8 billion.

Speaker #3: In equity products, revenues grew due to higher client activity in Japan and Asia, supporting a strong performance in the derivative business.

Speaker #3: In the Americas , business remained favorable . Execution services sustained strong revenue from the previous quarter . Please turn to page 14 . In this investment banking net revenue rose 15% to ¥43.5 billion .

Speaker #3: Corporate action in Japan remained consistently strong, and international business also contributed to revenue growth by product. In advisory, momentum remained strong in Japan, with multiple transactions involving financial sponsors and moves to take companies private in international business.

[Company Representative] (Nomura Holdings): Corporate action in Japan remained consistently strong, and international business also contributed to revenue growth. By product, in advisory, momentum remained strong in Japan with multiple transactions involving financial sponsors, and moves to take companies private. International business also made a contribution with M&A deals related to renewable energy and digital infrastructure, primarily in EMEA. Advisory continued to rank top in the Japan-related M&A league table for January through September, and ranked 15th in the global M&A league table, demonstrating its global presence. In financing and solutions, revenue rose in this same on continued solid performance in Japan, multiple international transactions, primarily in EMEA, and ALF deals, particularly in the Americas. Now let's look at banking. Please turn to page 15. In banking, net revenue came to JPY 12.9 billion, flat from the previous quarter.

Speaker #3: Also made a contribution with M&A deals related to renewable energy and digital infrastructure. Primarily in Nemea advisory, we continued to rank top in the Japan-related demand league table for January through September and ranked 15th in the global M&A league table, demonstrating our global presence in financing and solutions.

[Company Representative]: Advisory continued to rank top in the Japan-related demand league table for January through September and ranked 15th in the global M&A league table, demonstrating its global presence in financing and solutions. Revenue rose in DCM on continued solid performance in Japan and multiple international transactions, primarily in EMEA, as well as ALF deals, particularly in the Americas. Now let's look at banking. Please turn to page 15. In banking, net revenue came to ¥12.9 billion, flat from the previous quarter. Income before income taxes fell 12% to ¥3.2 billion. KPIs such as loans outstanding and investment trust balance remained at a high level, and revenue from lending business and trust agent business held firm. Meanwhile, higher costs pushed down profit as an upgrade to the core banking system completed at Nomura Trust and Banking in May 2025 resulted in the associated depreciation being fully booked this quarter.

Speaker #3: Revenue rose in DCM on continued solid performance in Japan and multiple international transactions, primarily in EMEA, as well as RF deals, particularly in the Americas.

Speaker #3: Now let's look at banking. Please turn to page 15. In banking, net revenue came to ¥12.9 billion, flat from the previous quarter.

Speaker #3: Income before income taxes fell 12% to ¥3.2 billion. KPIs such as loans outstanding and investment trust balance remained at a high level, and revenue from the lending business and trust agent business held firm.

[Company Representative] (Nomura Holdings): Income before income taxes fell 12% to JPY 3.2 billion. KPIs such as loans outstanding and investment trust balance remained at a high level, and revenue from lending business and trust agent business held firm. Meanwhile, higher costs pushed down profit as an upgrade to the core banking system completed at Nomura Trust & Banking in May 2025 resulted in the associated depreciation being fully booked this quarter. Preparations for the deposit sweep service scheduled for introduction in FY 2026, 2027 are progressing as planned. I will explain non-interest expenses. Please turn to page 16. Group-wide expenses came to JPY 378.8 billion, a 4% increase from the previous quarter. Compensation and benefits totaled JPY 195.1 billion, rising 5%, reflecting an increase in performance-linked bonus provisions.

Speaker #3: Meanwhile, higher costs pushed down profits; the upgrade to the core banking system completed at Nomura Trust and Banking in May 2025 resulted in the associated depreciation being fully booked.

Speaker #3: This quarter . Preparations for the deposit sweep service , scheduled for introduction in FY 20 2627 , are progressing as planned . Now , I will .

[Company Representative]: Preparations for the deposit sweep service scheduled for introduction in FY2026/27 are progressing as planned. Now I will explain non-interest expenses. Please turn to page 16. Group-wide expenses came to ¥378.8 billion, a 4% increase from the previous quarter. Compensation and benefits totaled ¥195.1 billion, rising 5%, reflecting an increase in performance-linked bonus provisions. Commissions and floor brokerage fees came to ¥47.2 billion, up 5%. The increase was driven by a heavier volume of transactions. Other expenses came to ¥52.8 billion, which includes ¥3.5 billion related to acquisition and integration of the U.S. asset management business of Macquarie Group, as well as the expense of paying compensation for losses arising from fraudulent trades in clients' accounts due to phishing incidents. I will comment in more detail on how the phishing incidents affected our profits this past quarter at the end of today's presentation.

Speaker #3: Explain non-interest expenses . Please turn to page 16 . Group wide expenses came to ¥378.8 billion . A 4% increase from the previous quarter .

Speaker #3: Compensation and benefits totaled ¥195.1 billion , rising 5% , reflecting an increase in performance linked bonus provisions , commissions and brokerage fees came to ¥47.2 billion , up 5% .

[Company Representative] (Nomura Holdings): Commissions and floor brokerage fees came to JPY 47.2 billion, up 5%. The increase was driven by a heavier volume of transactions. Other expenses came to JPY 52.8 billion, which includes JPY 3.1 billion related to acquisition and integration of the US asset management business of Macquarie Group, as well as the expense of paying compensation for losses arising from project and trades in clients' accounts due to phishing scams. I will comment in more detail on how the phishing scams affected our profits this past quarter at the end of today's presentation. Lastly, we take a look at our financial position. Page 17.

Speaker #3: The increase was driven by a heavier volume of transactions. Other expenses came to ¥52.8 billion, which includes ¥3.1 billion related to the acquisition and integration of the US asset management business of Macquarie Group, as well as the expense of paying compensation for losses arising from fraudulent trades in clients' accounts due to phishing scams.

Speaker #3: I will comment in more detail on how the phishing scam scams are affected, profits, this past quarter, at the end of today's presentation.

Speaker #3: Lastly , we take a look at the financial position . Page 17 . In the table on the bottom left , you can see that tier one capital at the end of September came to approximately approximately ¥3.6 trillion , up roughly ¥170 billion since the end of June .

[Company Representative]: Lastly, we take a look at the financial position, page 17, in the table on the bottom left. You can see that Tier 1 capital at the end of September came to approximately ¥3.6 trillion, up roughly ¥170 billion since the end of June, while risk-weighted assets came to ¥23.5 trillion, up roughly ¥660 billion. The common equity Tier 1 ratio at the end of September accordingly came to 12.9%. This is within our target range of 11% to 14%. Our common equity Tier 1 ratio finished the quarter down from the 13.2% marked at the end of June, but this decrease reflected the accumulation of positions commensurate with revenue opportunities as well as increase in the value of risk-weighted assets due to market factors. As we explained three months ago, the calculation method for regulatory capital ratios will change once the acquisition of Macquarie Group's U.S.

[Company Representative] (Nomura Holdings): In the table on the bottom left, you can see that Tier 1 capital at the end of September came to approximately JPY 3.6 trillion, up roughly JPY 170 billion since the end of June. While risk-weighted assets came to JPY 23.5 trillion, up roughly JPY 660 billion. The common equity Tier 1 ratio at the end of September accordingly came to 12.9%. This is within our target range of 11% to 14%. Our common equity Tier 1 ratio finished the quarter down from the 13.2% marked at the end of June. This decrease reflected the accumulation of positions commensurate with revenue opportunities, as well as increase in the value of risk-weighted assets due to market factors.

Speaker #3: While risk-weighted assets came to ¥23.5 trillion, up roughly ¥660 billion, the common equity tier one ratio at the end of September accordingly came to 12.9%.

Speaker #3: This is within our target range of 11% to 14%. Our Common Equity Tier One ratio finished the quarter down from the 13.2% marked at the end of June, but this decrease reflected the accumulation of positions commensurate with revenue opportunities, as well as the increase in the value of risk-weighted assets due to market factors.

Speaker #3: As we explained three months ago , the calculation method for regulatory capital ratios will change once the acquisition of Macquarie Group's US asset management business , as has been completed , and we currently expect this to depress the Cet1 ratio by about 0.7 percentage point .

[Company Representative] (Nomura Holdings): As we explained three months ago, the calculation method for regulatory capital ratios will change once the acquisition of Macquarie Group's US asset management business has been completed. We currently expect this to depress the CET1 ratio by about 0.7 percentage points. This concludes our overview of Q2 results. We would like to provide more detail on the issue of project trading in client assets resulting from phishing scams. In response to instances of fraud and trading, we have raised the security level in stages, and the number and scale of damages have come down greatly from April peak. At this point, we have been in direct contact with nearly all clients that have been affected by the attacks, and we are working through the process of paying a compensation to them.

[Company Representative]: asset management business has been completed, and we currently expect this to depress CET1 ratio by about 0.7 percentage point. This concludes our overview of second quarter results. We would like to provide more detail on the issue of frozen trading in client assets resulting from phishing incidents. In response to instances of frozen trading, we have raised the security level in stages, and the number and scale of damages have come down greatly from the April peak. At this point, we have been in direct contact with nearly all clients that have been affected by the attacks, and we are working through the process of paying compensation to them. There are times during the second quarter when the related damages increased again, but at present, the situation has settled down owing to various steps undertaken to address the issue.

Speaker #3: This concludes our overview of second-quarter results. We would like to provide more detail on the issue of trading in client assets resulting from phishing scams.

Speaker #3: In response to instances of fraudulent trading, we have raised the security level in stages, and the number and scale of damages have come down greatly from the April peak.

Speaker #3: At this point, we have been in direct contact with nearly all clients who have been affected by the attacks, and we are working through the process of paying compensation to them.

Speaker #3: There are times during the second quarter when the related damages increase again, but at present, the situation has settled down owing to various steps undertaken to address the issue.

[Company Representative] (Nomura Holdings): There were times during the Q2 when the related damages increased again, but at present, the situation has settled down owing to various steps undertaken to address the issue. In the Q2, the negative impact on the profits came to JPY -4.8 billion, although the number of damages fell sharply, fluctuation in share prices led to high costs in some cases to restore our clients' assets to their original condition. In this regard, we are working to avoid market volatility risk to the greatest extent possible. On 18 October, we introduced a passkey authentication system that is recognized as an effective means of thwarting phishing attempts, and we are strengthening measures to eliminate such damages.

Speaker #3: In the second quarter , the negative impact on the profit came to ¥4.8 billion , although the number of damages fell sharply . Fluctuations in share prices led to high costs in some cases to restore our client's assets to their original condition .

[Company Representative]: In the second quarter, the negative impact on the profit came to ¥4.8 billion. Although the number of damages fell sharply, fluctuation in share prices led to high costs in some cases to restore clients' assets to their original condition. In this regard, we are working to avoid market volatility risk to the greatest extent possible. On October 18, we introduced a Pask authentication system that is recognized as an effective means of thwarting phishing attempts, and we are strengthening measures to eliminate such damages. Looking ahead, we expect that the impact of phishing incidents will be much smaller than it has been up through the second quarter, judging from the current state of damages. Our swift action to implement high-quality security countermeasures does more than just limit the damages suffered by our clients. It enhances the security and convenience of the financial services we provide.

Speaker #3: In this regard, we are working to avoid market volatility risks to the greatest extent possible. On October 18th, we introduced a package authentication system that is recognized as an effective means of thwarting phishing attempts.

Speaker #3: And we are strengthening measures to eliminate such damages. Looking ahead, we expect that the impact of phishing scams will be much smaller than it has been up through the second quarter.

[Company Representative] (Nomura Holdings): Looking ahead, we expect that the impact of phishing scams will be much smaller than it has been up through Q2 judging from the current state of damages. Our swift action to implement high-quality security countermeasures does more than just limit the damages suffered by our clients. It enhances the security and the convenience of the financial services we provide. Our plan is to be proactive in assembling effective account security measures in our role as an industry leader and thereby reinforce our brand as the most trusted partner for our clients. I would like to close with some final remarks. During the quarter just finished, stock indices in Japan and other major economies rose steeply amid lessened uncertainty over the trajectory of US interest rates and widespread interest in AI-related stocks and other high-tech stocks.

Speaker #3: Judging from the current state of damages, our swift action to implement high-quality security countermeasures does more than just limit the damages suffered by our clients.

Speaker #3: It enhances the security and convenience of the financial services we provide. Our plan is to be proactive in assembling effective account security measures in our role as an industry leader, and thereby reinforce our brand as the most trusted partner for our clients.

[Company Representative]: Our plan is to be proactive in assembling effective account security measures in our role as an industry leader and thereby reinforce our brand as a most trusted partner for our clients. I would like to close with some final remarks. During the quarter just finished, stock indices in Japan and other major economies rose, which should simply be attributed to lessening uncertainty over the trajectory of U.S. interest rates and the widespread interest in AI-related stocks and other high-tech stocks. Those conditions helped us record another quarter of strong earnings as we expanded our stable source of revenue and successfully monetized robust client flows. EPS in the second quarter came to ¥30.49, and ROE came to 10.6%. For six quarters in a row, we have attained a quantitative target for 2030 announced last year of consistently achieving ROE of 8% to 10% or more.

Speaker #3: I would like to close with some final remarks during the quarter. Just finished talking, indices in Japan and other major economies rose steeply, a bit less than the uncertainty over the trajectory of U.S. interest rates and widespread interest in AI-related stocks and other high-growth stocks.

Speaker #3: High-tech stocks. Those conditions helped us record another quarter of strong earnings as we expanded our stable source of revenue and successfully monetized robust client flows.

[Company Representative] (Nomura Holdings): Those conditions helped us record another quarter of strong earnings as we expanded our stable source of revenue and successfully monetized robust client flows. EPS in Q2 came to JPY 30.49, and ROE came to 10.6%. For 6 quarters in a row, we have attained a quantitative target for 2030 announced last year of consistently achieving ROE of 8% to 10% or more. In addition, our ROE for H1 of the fiscal year was 11.3%. As mentioned at the beginning of this presentation, we have seen solid growth in our key sources of stable revenue, including recurring revenue in wealth management, business revenue in investment management, and net revenue in banking. This has added further to the stability of our company-wide performance.

Speaker #3: EPs in the second quarter came to ¥30.49, and ROE came to 10.6% for six quarters in a row. We have attained a quantitative target for 2030, announced last year, of consistently achieving our year of 8 to 10% or more. In addition, for the first half of the fiscal year, ROE was 11.3%.

[Company Representative]: In addition, ROE for the first half of the fiscal year was 11.3%. As mentioned at the beginning of this presentation, we have seen solid growth in our key sources of stable revenue, including recurring revenue in wealth management, business revenue in investment management, and net revenue in banking. This has added further to the stability of company-wide performance in wholesale, as well as steadily achieving independently sustainable growth under the self-funding approach. Revenues and profits in the division have both been increasing. In the continuation of last year's trend, an overseas business which has long presented a challenge has gained ground in making a steady profit contribution. Let me briefly touch on the situation in October in wealth management. Net revenue thus far in October is well above the levels observed in the second quarter.

Speaker #3: As I mentioned at the beginning of this presentation , we have seen solid growth in our key sources of stable revenue , including revenue , recurring revenue in wealth management , business , revenue in investment management and net revenue in banking .

Speaker #3: This has added further to the stability of our company-wide performance wholesale, as well as achieving independently sustainable growth under the self-funding approach. Revenues and profits in the division have both been increasing in the continuation of a larger trend in overseas business, which has long presented a challenge, but has gained ground in making a profit contribution.

[Company Representative] (Nomura Holdings): Wholesale as well is steadily achieving independently sustainable growth under the self-funding approach. Revenues and profits in the division have both been increasing in a continuation of last year's trend. Overseas business, which has long presented a challenge, has gained ground in making a steady profit contribution. Let me briefly touch on the situation in October. In wealth management, net revenue thus far in October is well above the levels observed in Q2. We have seen a continuous medium to long-term growth in investment trust, discretionary investment, and other such products and services premised on the idea of long-term diversified investment, and this trend has continued in October. The flow from savings to investment has become well-established, and we have tangible sense that the client base for investment in marketable securities have broadened steadily.

Speaker #3: Let me briefly touch on the situation in October in world management. Net revenue thus far in October is well above the levels observed in the second quarter.

Speaker #3: We have seen a continuous medium- to long-term growth in investment trusts. Discretionary investment and other such products and services are premised on the idea of long-term diversified investment, and this trend has continued.

[Company Representative]: We have seen continuous medium to long term growth in investment trust, discretionary investment, and other such products and services premised on the idea of long term diversified investment, and this trend has continued in October. The flow from savings to investment has become well established. We have a tangible sense that the base for investment in marketable securities has broadened steadily. We intend to continue playing a part to transform Japan into an internal asset management powerhouse by building relationships of trust with our clients and providing them with asset management services tailored to their needs. In wholesale GM business, equity products have continued performing well. In investment banking, we expect the current high frequency of corporate actions to continue in October. Thus far, the net revenue in wholesale continues to be solid.

Speaker #3: In October, the flow from savings to investment has become well established, and we have a tangible sense that the client base for investment in marketable securities has broadened steadily.

Speaker #3: We intend to continue playing a part to to transform our internal advantages and powerhouse by building relationships of trust with our clients and provide providing , providing them with asset management services tailored to their needs .

[Company Representative] (Nomura Holdings): We intend to continue playing our part to transform Japan into an asset management powerhouse by building relationship of trust with our clients and providing them with asset management services tailored to their needs. In Wholesale GM business, equity products have continued performing well. In investment banking, we expect the current high frequency of corporate actions to continue in October thus far. The net revenue in Wholesale continues to be solid. Going forward, we aim to raise our profit baseline by taking on risks appropriate to market conditions, and we ask for your continued support.

Speaker #3: In wholesale GM, business equity products have continued performing well in investment banking. We expect the current high frequency of corporate actions to continue in October.

Speaker #3: Thus far, the net revenue in wholesale continues to be solid. Going forward, we aim to raise our profit baseline by taking on risks appropriate to market conditions, and we ask for your continued support.

[Company Representative]: Going forward, we aim to raise our profit baseline by taking on risks appropriate to market conditions. We ask for your continued support.

Speaker #1: We have a question and answer session now . If you have a question , press sharp seven . If you want to cancel a question , press sharp seven .

Operator: We have a question and answer session now. If you have a question, press #7. If you want to cancel a question, press #7.

Operator: We have a question-and-answer session now. If you have a question, press sharp seven. If you want to cancel a question, press sharp seven.

Hiroyuki Moriuchi: The first question, BofA Securities, Tsujino. Tsujino, please go ahead. Thank you. This is Tsujino. 2 questions. First is regarding the personnel expenses. As explained, in Q1, you had the UK, and according to the accounting rules, every year the expenses tends to be high. You started at a low level, and this time, compared to Q1, the yen has weakened slightly, so the costs are a bit higher. Even so, if you look at it on a Q-on-Q basis, the personnel or compensation and benefits has increased too much, I think. Considering the wholesale revenue and even compared to that, I think comp and benefits has increased too much, is my impression. Could you add more color on that, please? Is my first point.

Speaker #2: The first question . Bank of America Securities . Tsujino San . Please go ahead . Thank you . This is Susan . Two questions .

Hiroyuki Moriuchi: The first question, BofA Securities, Tsujino-san. Tsujino-san, please go ahead. Thank you. This is Tsujino. Two questions. First is regarding the personnel expenses, and as explained in Q1, you had the UK, and according to the accounting rules, every year the expenses tend to be high. You started at a low level, and this time compared to Q1, the yen has weakened slightly, so the costs are a bit higher. Even so, if you look at it on a Q-on-Q basis, the personnel or compensation and benefits has increased too much. I think considering the wholesale revenue, and even compared to that, I think comp and benefits has increased too much, is my impression. Could you add more color on that, please? That is my first point.

Speaker #2: First is regarding the personnel expenses, and as explained in Q1, you had the UK, and according to the accounting rules, every year the expenses tend to be high.

Speaker #2: So you started at a low level , and this time , compared to Q1 , the yen has weakened slightly . So the costs are a bit higher .

Speaker #2: But even so , if you look at it on a Q on Q basis , the personnel or compensation and benefits has increased too much .

Speaker #2: I think . Considering the wholesale revenue and even compared to that , I think comp and benefits has increased too much is my impression .

Speaker #2: So, could you add more color on that, please? That is my first point. My other point is, and this was the case in the past too.

Hiroyuki Moriuchi: My other point is, and this was the case in the past too, but the CET1 ratio is within target range, and after the Macquarie acquisition, it'll go down a little bit, and it was 12.5% or so, which, and you said you were not exactly fully comfortable with that. Now the market is strong, and the positions tend to increase. For this year, regarding the buybacks, is there going to be any change compared to the past? Maybe you can't disclose that, but any color on that too, please. Thank you. Tsujino-san, this is Hiroyuki Moriuchi. Regarding your first question about comp and benefits, yes, the points you raised are all correct, and yes, let me add some color to that.

Natsumu Tsujino: My other point is, this was the case in the past too, the CET1 ratio is within target range, after Macquarie acquisition, it'll go down a little bit. Was 12.5 or so, which you said you were not exactly fully comfortable with that. Now the market is strong, the position tends to increase. For this year, regarding the buybacks this year, is there gonna be any change compared to the past? Could you, maybe you can't disclose that, any color on that too, please. Thank you, Tsujino-san. This is Moriuchi. Regarding your first question about comp and benefits. Yes, the points you raised are all correct. Yes, let me add some color to that. Within the compensation and benefits, there's the bonus increase linked to our earnings. That is a big factor.

Speaker #2: But the CET1 ratio is within the target range, and after the Macquarie acquisition, it will go down a little bit. It was 12.5% or so.

Speaker #2: And you said you were not exactly fully comfortable with that. So now the market is strong and the position tends to increase.

Speaker #2: So for this year regarding the buybacks this year , is there going to be any change compared to the past . So could you maybe you can't disclose that .

Speaker #2: But any color on that too please . Thank you . This is Moriuchi . Regarding your first question about comp and benefits . Yes .

Speaker #2: The points you raised are all correct, and yes, let me add some color to that. Within the compensation and benefits, there's the bonus increase linked to our earnings.

Hiroyuki Moriuchi: Within the compensation and benefits, there's the bonus increase linked to our earnings that is a big factor, and on top of that, there was some retirement bonus increase in wholesale, for example, and that does tend to happen as part of our business. In this quarter, the retirement payments was a little larger than usual. That's my answer to your first question. For the second question regarding the CET1 ratio target, 12.9% is going to go down to 12.8%. How we think about the buybacks this year? As for buybacks and for shareholder return in general, we have committed to the market of 40% dividend or above and total payout ratio of 50% or above, and we plan to stick to that as we consider shareholder return.

Speaker #2: That is a big factor . And on top of that . There was some retirement bonus increase in wholesale . For example . And .

Hiroyuki Moriuchi: On top of that, there was some retirement bonus increase in wholesale, for example. That does tend to happen as part of our business. In this quarter, the retirement payments was a little larger than usual. That's my answer to your first question. For the second question, regarding the CET1 ratio target, 12.9%, it's going to go down to 12.9%, but how we think about the buybacks this year. Well, as for buybacks and for shareholder return in general, we have committed to the market of 40% dividend or above and total payer ratio of 50% or above. We plan to stick to that as we consider shareholder return. We had the Macquarie closing, and the CET1 ratio is going to decline further from here.

Speaker #2: That tends to happen as part of our business. In this quarter, the retirement payments were a little larger than usual.

Speaker #2: So that's my answer to your first question. And for the second question regarding the set one ratio target of 12.9%, it's going to go down to 12.9%.

Speaker #2: But how we think about the buybacks this year. Well, as for buybacks and for shareholder return in general, we have committed to the market to a 40% dividend or above and a total payout ratio of 50% or above.

Speaker #2: And we plan to stick to that as we consider shareholder return. And we had the Macquarie closing and the set one ratio.

Hiroyuki Moriuchi: We had the Macquarie closing, and the CET1 ratio is going to decline further from here, and within wholesale at the moment, we are seeing some high quality deals and opportunities, and those are increasing. From an investment perspective and financial discipline perspective and shareholder return, we will keep those three factors in mind. It's quite hard to balance those three, but we will make sure to stick to our commitments. Thank you. Hope that answers your question. Yes, thank you very much.

Speaker #2: Is going to decline further from here . And within wholesale at the moment we are seeing some high quality deals and opportunities . And those are increasing .

Hiroyuki Moriuchi: Within wholesale at the moment, we are seeing some high-quality deals and opportunities, and those are increasing. From an investment perspective, financial discipline perspective, and shareholder return, we will keep those three factors in mind, and it's quite hard to balance those three, but we will make sure to stick to our commitments. Thank you. Hope that answers your question.

Speaker #2: So, from an investment perspective, and financial discipline perspective, and shareholder return, we will keep those three factors in mind. It's quite hard to balance those three.

Speaker #2: But we will make sure to stick to our commitments . Thank you . Hope that answers your question . Yes . Thank you very much .

Hiroyuki Moriuchi: Yes, thank you very much. The next person asking a question is SMBC Nikko Securities, Mr. Muraki. Muraki-san, please. I'm Muraki from SMBC Nikko. I have two questions. First question is about markets department's revenue. In macro, revenue seems weak. Credit and equity derivatives, Oh, sorry, securitized products and equity derivatives seem strong. That way revenue is generated. The page 17, the credit risk RWA increase has followed or is continuing. Where are you taking the risk, and what kind of revenue is being generated? Recently you said there are quality deals, but what kind of risk-taking is expected in that Q3? Could you explain? That's my first question, market revenue and risk-taking. My second question is as follows.

Speaker #3: The next person asking the question is SMBC Nikko Securities . Mr. Muraki Murugesan , please . I'm Muraki from SMB . Nicole , I have two questions .

[Company Representative]: The next person asking the question is SMBC Nikko Securities, Mr. Muraki. Muraki-san, please. I'm Muraki from SMBC Nikko. I have two questions. First question is about Markets department's revenue. Now in macro, revenue seems weak and credit and equity derivatives, oh sorry, securitized products and equity derivatives seem strong, but that way revenue is generated and on page 17 the credit risk RWA increase has followed or is continuing. Where are you taking the risk and what kind of revenue is being generated? Recently you said there are quality deals, but what kind of risk taking is expected in the third quarter? Could you explain? That's my first question: market revenue and risk taking. My second question is as follows. The first brands failure, so from such incidents did you have some impact or any lesson that you have taken?

Speaker #3: First question is about markets, developments, and revenue. Now, in macro, revenue seems weak, and created an equity derivatives and securitized products. Equity derivatives seem strong.

Speaker #3: But that way, revenue is generated, and on page 17, the credit risk RWA increase has followed it or is continuing. And where are you taking the risk, and what kind of revenue is being generated?

Speaker #3: And recently you said there are quality deals, but what kind of risk-taking is expected in the third quarter? So could you explain that?

Speaker #3: My first question , market revenue and risk taking and my second question is as follows . The first brands failure . So such incident from such incidents , did you have some impact or any lesson that you have taken ?

Masao Muraki: The First Brands' failure, from such instance, did you have some impact or any lesson that you have taken? Regarding private credit, oftentimes there are many inquiries we receive about private credit. By looking at your balance sheet, trading book loan is JPY 1.9 trillion. Other than that, excluding Nomura Trust & Banking, loan is about JPY 1.2 trillion. In America's securitization department or private credit related business, what is the size of that business in this overall number? Could you give me some sense? Thank you.

Speaker #3: And regarding private credit , oftentimes there are many inquiries we receive about private credit by looking at your balance sheet , trading book loan is ¥1.9 trillion , and other than that , excluding Nomura Trust and Banking loan is about ¥1.2 trillion in America's securitized securitization department , or private credit related business .

[Company Representative]: Regarding private credit, oftentimes there are many inquiries we receive about private credit. By looking at your balance sheet, trading book loan is ¥1.9 trillion and other than that, excluding nominal trust and banking, loan is about ¥1.2 trillion. In Americas securitization department or private credit related business, what is the size of the business in this overall number? Could you give me some sense? Thank you. Thank you very much for your questions. For your first question regarding credit risk, where we are taking and how we are taking credit risks in the first quarter and second quarter, as you say, SPBC and equity derivatives were very strong. Also, usually in credit trading business or credit trading business contributed to revenue solidly. What is the outlook for the third quarter? As you said, related to SPBC, there are interesting deals in the pipeline.

Speaker #3: What is the size of the business in this overall number ? Could you give me some sense ? Thank you . Thank you very much for your questions , for your first question regarding credit risk , where we are taking and how we are taking credit risks in the first quarter and second quarter , as you say , SPC and equity derivatives were very strong .

Hiroyuki Moriuchi: Thank you very much for your questions. For your first question regarding credit risk, where we are taking and how we are taking credit risks. In Q1 and Q2, as you say, SPPC and equity derivatives were very strong. Also, usually in credit trading business contributed to revenue solidly.

Speaker #3: Also, usually in the credit trading business, credit trading has contributed to revenue solidly. What is the outlook for the third quarter?

[Company Representative] (Nomura Holdings): What is the outlook for Q3, as you said, related to SPPC? There are interesting deals in the pipeline. On the other hand, it's related to your second question, but in our credit business, including First Brands, whether we see abnormality in credit market, we receive such questions often. Regarding SPPC, internally, we have been having various discussions, and high profitability deals are lined up. On the other hand, in our balance sheet, concentration risk on SPPC is something we have to be mindful of. More than ever before, we have to be selective in deciding which deal to do. In our total portfolio, SPPC portion is not going to be grown rapidly from where it is now.

Speaker #3: As you said , related to SPC ? There are interesting deals in the pipeline . On the other hand , you are it's related to your second question , but in our credit business , including first brand , whether we see abnormality in credit market , we receive such questions often regarding SPC .

[Company Representative]: On the other hand, it's related to your second question, but in our credit business including first brand, whether we see abnormality in credit market, we receive such questions often. Regarding SPBC, internally we have been having various discussions and high profitability deals lined up. On the other hand, in our balance sheet, concentration risk on SPBC is something we have to be mindful of. More than ever before, we have to be selective in deciding which deal to do, so in our total portfolio, SPBC portion is not going to be grown rapidly from where it is now. Regarding your second question about first brand related impact as well as lessons we have learned and also the scale or magnitude. Firstly, regarding this specific case, impact on our business of P and L was very small.

Speaker #3: Internally , we have been having various discussions and high profitability deals are lined up . On the other hand , in our balance sheet , concentration risk on SPC is something we have to be mindful of .

Speaker #3: So more than ever before , we have to be selective in deciding which deal to do so . In our total portfolio . SPC portion is not going to be grown rapidly from where it is now .

Speaker #3: Regarding your second question about first brands related to impact, as well as lessons we have learned and thus scale or magnitude.

[Company Representative] (Nomura Holdings): Regarding your second question about our First Brands Group related impact, as well as lessons we have learned and also the scale or magnitude. Firstly, regarding this specific case, our impact on our business or P&L was very small from this specific case. To a certain extent, we had some exposure, but it's negligible in size. Also, this name in question did not cause direct cost. Is there a broader implication related to this? As you say, regarding firmwide stress testing periodically and non-periodically, we conduct a stress test to see the changing pattern of tail risk. Looking at our existing portfolio, whether the risks has grown bigger a lot or not, the risk is not growing rapidly because in SPPC business, a private credit business portion in size is very small. The SPPC business has mortgage structure lending and infrastructure business.

Speaker #3: Firstly , regarding this specific case where impact on our business or was very small from the specific case to a certain extent , we had some exposure , but it's negligible in size .

[Company Representative]: From this specific case to a certain extent we had some exposure, but it's negligible in size. Also, this name in question did not cause direct cost. Is there a broader implication related to this? As you say regarding firmwide stress testing, periodically and non-periodically we conduct a stress test to see the changing pattern of tail risk. Indeed, looking at our existing portfolio, whether the risks have grown bigger a lot or not, the risk is not growing rapidly because in SPPC business, private credit business portion in size is very small. The SPPC business has mortgage structure, lending, and infrastructure business, so those represent a big portion. Regarding private credit, private credit related business is right now in the sense of the balance sheet of our P and L, the impact from that is not big. Even though I cannot give you a specific number.

Speaker #3: Also . This name in question . Did not cause direct cost . And is there a broader implication related to this ? As you say regarding firm wide stress testing periodically and periodically we conduct a stress test to see that changing pattern of tail risk .

Speaker #3: Indeed , looking at our existing portfolio , whether the risks has grown bigger a lot or not , the risk is not growing rapidly because in SPC business , a private credit business portion insights is very small .

Speaker #3: So the SPC business has mortgage structure , lending and infrastructure business . So those represent big portion . So regarding private credit , private credit , private credit related business is right now .

Masao Muraki: Those represent a big portion. Regarding private credit related business is right now in the sense of the balance sheet or our P&L. The impact from that is not big, even though I cannot give you a specific number. That's all. Thank you very much. If possible, I am deviating from the earnings result, but I'd like to ask you about your perspective. Risks related to First Brand, which you mentioned, what kind of risks are you paying attention to? For example, simply put, is it simple credit risk or non-bank intermediary related risks or double collaterals were involved in some companies transactions, but is there a risk of fraudulent transactions that you may be involved in? Specifically, what kind of risks are you being attentive to? Thank you very much.

Speaker #3: In the sense of the balance sheet or our P&L, the impact from that is not big. Even though I cannot give you a specific number.

Speaker #3: That's all . Thank you very much . If possible , I am deviating from the earnings result , but I'd like to ask you about your perspective .

[Company Representative]: That's all, thank you very much. If possible, I am deviating from the earnings result, but I'd like to ask you about your perspective related to first brand. Risks related to first brand which you mentioned, what kind of risks are you paying attention to? For example, simply put, is it simple credit risk or non-bank intermediary related risks or double collaterals were involved in some companies' transactions, but is there a risk of fraudulent transactions that you may be involved? Specifically, what kind of risks are you being attentive to? Thank you very much. It's not that because this incident happened, but regarding individual cases credit, we need to perform due diligence closely to look at the credit worthiness of each case and regarding the fraudulent case or scam.

Speaker #3: So related to first round . So risks related to first round , which you mentioned . What kind of risks are you paying attention to .

Speaker #3: For example , simply put , is it a simple credit risk or non-bank intermediary related risks or w collaterals were involved in some companies transactions , but is there a risk of fraudulent transactions that you may be involved in ?

Speaker #3: So specifically , what kind of risks are you being attentive to ? Thank you very much . It's not that because this incident happened , but regarding individual cases , credit , we need to perform due diligence closely to look at the credit worthiness of each case .

[Company Representative] (Nomura Holdings): It's not that because this incident happened, but regarding individual cases, credit, we need to perform due diligence closely to look at the credit worthiness of each case. Regarding the fraudulent case or scam, all we can do is to conduct a thorough due diligence to screen for the fraudulent trading. Regarding the non-bank intermediaries, unlike commercial banks, we are a firm that's focused on the trading. What we take is inventory as a counterparty. How should I put it? Non-bank credit risks themselves are not taken greatly by us. The risk which I mentioned is in the sense that regarding individual transactions, we pay close attention to credit. For example, for the specific individual cases, when we receive sizable deal to conduct, we are not a major firm. Our balance sheet size is limited.

Speaker #3: And regarding the fraudulent case or scam by the . All we can do is to conduct a thorough due diligence to screen for the fraudulent trading regarding the non-bank intermediaries .

Hiroyuki Moriuchi: But.

[Company Representative]: All we can do is to conduct thorough due diligence to screen for the fraudulent trading. Regarding the non-bank intermediaries, unlike commercial banks, we are a firm that's focused on the trading, so what we take is inventory as a counterparty. How should I put it? Non-bank credit risks themselves are not taken greatly by us. The risk which I mentioned is in the sense that regarding individual transactions, we pay close attention to credit, and for example, for the specific individual cases when we receive sizable deal to conduct, we are not a major firm. Our balance sheet size is limited, so to what extent do we allocate balance sheet to one transaction? What is the level of concentration risk? Those are the matters that we closely evaluate as we make a decision, and that's what we will have to keep doing. Fully understood.

Speaker #3: Unlike commercial banks , we are firm that focused on the trading . So what we take is inventory as a counterparty . So how should I put it ?

Speaker #3: Non-bank credit risks themselves are not taken greatly by us. The risk which I mentioned is in the sense that regarding individual transactions, we pay close attention to credit.

Speaker #3: And for example, for the specific individual cases, when we receive a sizable deal to conduct, we are not a major firm.

Speaker #3: Our balance sheet size is limited. So, to what extent do we allocate the balance sheet to one transaction? What is the level of concentration risk?

[Company Representative] (Nomura Holdings): To what extent do we allocate balance sheet to one transaction? What is the level of concentration risk? Those are the items or matters that we closely evaluate as we make a decision, and that's what we will have to keep doing. Fully understood. Thank you very much for the explanation.

Speaker #3: So those are the items or matters that we closely evaluate as we make decisions. And that's what we will have to keep doing.

Speaker #3: Fully understood. Thank you very much for the explanation.

[Company Representative]: Thank you very much for the explanation.

Speaker #2: The next question is from Mr. Watanabe . Daiwa securities . Watanabe San , please go ahead . Thank you . This is Watanabe from Daiwa Securities .

Hiroyuki Moriuchi: The next question is from Mr. Kazuki Watanabe of Daiwa Securities. Watanabe-san, please go.

Hiroyuki Moriuchi: The next question is from Mr. Watanabe of Daiwa Securities. Watanabe-san, please go ahead. Thank you. This is Watanabe from Daiwa Securities. Two questions, please. First is regarding the October revenue environment. In wholesale equity and IB is strong, which I understand. For FIG, what are the trends you see in FIG? Compared to Q2, if you look at the wholesale division revenue, is it above or higher or lower, please? Number 2 is the tax burden, page 5. If you look at it year on year, the pre-tax income is increasing, but the net profit is down. International pre-tax income size is larger, but the tax rate is going up. Why is that, please? Two questions. Thank you, Watanabe-san. This is Moriuchi. Regarding your first question, the fixed income trends. First, for Japan, fixed income is quite strong.

[Company Representative]: Ahead.

Hiroyuki Moriuchi: Thank you. This is Watanabe from Daiwa Securities. Two questions, please. First is regarding the October revenue environment, and in wholesale, equity and IB is strong, which I understand, but for FIG, what are the trends you see in FIG, and compared to Q2, if you look at the wholesale division revenue, is it above or higher or lower? Please. Number two is the tax burden. Page five, if you look at it year on year, the pre-tax income is increasing, but the net profit is down, and international pre-tax income size is larger, but the tax rate is going up. Why is that? Please, two questions. Thank you. Watanabe-san, this is Moriuchi. Regarding your first question, the fixed income trends, first for Japan, fixed income is quite strong in the first half.

Speaker #2: Two questions, please. First, regarding the October revenue environment. In wholesale equity and investment banking, performance is strong, which I understand, but for FIG.

Speaker #2: , what are the trends you see in Fig and compared to Q2 , if you look at the wholesale division revenue , is it above or higher or lower ?

Speaker #2: Please ? Number two is the tax burden . Page five . If we look at it year on year , the pre-tax income is increasing .

Speaker #2: But the net profit is down. And international pre-tax income size is larger. But the tax rate is going up. Why is that?

Speaker #2: Please two questions .

Speaker #4: I .

Speaker #2: Thank you . This is Moriuchi . Regarding your first question . The fixed income trends . First , for Japan . Fixed income is quite strong .

Speaker #2: In the first half for the ultra long term , long term domain . It was quite difficult , including position taking . But even in that domain , we are seeing a normalization and the market is very active and the revenues are catching up in accordance with that is my impression for fixed income in Japan .

Hiroyuki Moriuchi: In H1 for the ultra long-term, long-term domain, it was quite difficult, including position taking. Even in that domain, we are seeing a normalization and the market is very active, and the revenues are catching up in accordance with that, is my impression for fixed income in Japan. As for international, I think we're seeing a similar trend, similar to H1. From here on, depending on the rate environment going forward, there could be upside. As part of the overall portfolio, when fixed income improves, that tends to normalize the other businesses. As we bundle the overall business, we are seeing an increase in stable revenues, and that level is gradually improving, is my impression. That's my first answer. Your second question regarding the tax burden or the tax cost going up slightly.

Hiroyuki Moriuchi: For the ultra long term, long term domain, it was quite difficult, including position taking, but even in that domain, we are seeing a normalization, and the market is very active, and the revenues are catching up in accordance with that, is my impression for fixed income in Japan. As for international, I think we're seeing a similar trend, similar to first half, and from here on, depending on the rate environment going forward, there could be upside, and as part of the overall portfolio, when fixed income improves, that tends to normalize the other businesses. As we bundle the overall business, we are seeing an increase in stable revenues, and that level is gradually improving, is my impression. That's my first answer. Your second question regarding the tax burden or the tax cost going up slightly? Sorry, it's hard to go into the details.

Speaker #2: As for international , I think we're seeing a similar trend similar to first half . And from here on , depending on the rate environment going forward , there could be upside .

Speaker #2: And as part of the overall portfolio , when fixed income improves , that starts . That tends to normalize the other businesses . But as we bundle the overall business , we are seeing an increase in stable revenues .

Speaker #2: And that level is gradually improving, is my impression. That's my first answer. Your second question regarding the tax benefit, tax burden, or the tax cost going up slightly.

Speaker #2: Sorry, it's hard to go into the details. There are a lot of technical issues here. So, this is what I can say now.

Hiroyuki Moriuchi: Sorry, it's hard to go into the details. There's a lot of technical issues here. What I can say now. Well, I won't go into the technical details. Thank you. Thanks very much. Just to check on the first point. In October, wholesale division revenue compared to Q2, is it above? Is it higher? Well, overall it is strong, but I would say it's about the same level. It's still only been 3 or 4 weeks. We'll see where things go. It's still a bit early to say, but just for the first 3 weeks, I would say it's about the same level. Thank you. Understood.

Hiroyuki Moriuchi: There's a lot of technical issues here. What I can say now, I won't go into the technical details. Thank you. Thanks very much. Just to check on the first point, in October, wholesale division revenue compared to Q2, is it above? Is it higher? Overall, it is strong, but I would say it's about the same level. It's still only been three or four weeks, so we'll see where things go. It's still a bit early to say, but just for the first three weeks, I would say it's about the same level. Thank you. Understood.

Speaker #2: Well , I won't go into the technical details . Thank you . Thanks very much . Just to check on the first point in October , wholesale Division revenue compared to Q2 .

Speaker #2: Is it above is it higher ? Well , overall it is strong . But I would say it's about the same level . It's still only been 3 or 4 weeks .

Speaker #2: So we'll see where things go. It's still a bit early to say, but just for the first three weeks, I would say it's about the same level.

Speaker #2: Thank you . Understood .

Speaker #3: The next question comes from JP Morgan securities . Sato San . Sato San , please . Thank you . I am Sato from JP Morgan securities .

[Company Representative]: The next question comes from JPMorgan Securities. Sato-san. Sato-san, please. Thank you. I am Sato from JPMorgan Securities. I have two questions. First question, sorry for dwelling on this, but wholesale equities or especially equity product business, so the revenue has reached the record high level. Firstly, in the short term, in the first quarter, Americas derivative did well. If I recall at this time, looking at the material, Japan AEJ had a significant increase in revenue. Anyways, derivative seems to be the strong area. If it is fine with you, over the several quarters in each region, what has been the trend of movement of each business line over the last several quarters and such trends, is it sustainable over the next several quarters in the future? Can you give me some sense? My second question is about risk asset.

Hiroyuki Moriuchi: The next question comes from J.P. Morgan Securities, Sato. Sato, please. Thank you. I am Sato from J.P. Morgan Securities. I have two questions. First question, sorry for dwelling on this, but wholesale equities or especially equity product business. The revenue has reached the record high level. Firstly, in the short term, in Q1, America's derivatives did well, if I recall. This time, looking at the material, Japan AEJ had a significant increase in revenue. Anyways, derivatives seems to be the strong area, but if it is fine with you, over the several quarters in each region, what has been the trend of movement of each business line over the last several quarters? Such trend, is it sustainable over the next several quarters in the future? Can you give me some sense? My second question is about risk assets.

Speaker #3: I have two questions . First question . Sorry for dwelling on this , but wholesale equities or especially equity product business . So the revenue has reached the record high level .

Speaker #3: But the firstly in the short term in the first quarter , Americas derivative did well . If I recall . But this time looking at the material , Japan had significant increase in revenue .

Speaker #3: Anyways, derivative seems to be the strong area. But if it is fine with you, over the several quarters in each region, what has been the trend of movement of each business line over the last several quarters and such trend?

Speaker #3: Is it sustainable over the next several quarters? In the future? Can you give me some sense? My second question is about risk assets.

Speaker #3: The target range is set at 11% to 14%, and in the situation now, after the closing of the Macquarie acquisition, it will come to around 12%.

[Company Representative]: The target range is set at 11% to 14% and in this situation now, after the closing of Macquarie acquisition, it will come to around 12%. CET1 ratio, if it's a 3 trillion yen, if a core equity, then it's. If it's 11%, then it's going to be 27 trillion yen. For the time being, is that going to be the allowable ceiling of risks you can take? Can I have that sense? I'd like to ask you to elaborate on the capacity of risk taking. Sato-san, thank you for your questions. Firstly, your first question, equities. What was the equities performance in each region and what is the extent of sustainability moving forward?

Koki Sato: The target range is set at 11% to 14%. In this situation now, after the closing of Macquarie acquisition, it will come to around 12%, but the CET1 ratio, if it's JPY 3 trillion, if core equity, then if it's 11%, then it's gonna be JPY 27 trillion. For the time being, is that going to be the allowable ceiling of risks you can take? Can I have that sense? I'd like to ask you to elaborate on the capacity of risk-taking.

Speaker #3: But Cet1 ratio . If it's a ¥3 trillion , if I could then it's if it's 11% , then it's going to be ¥27 trillion .

Speaker #3: Then for the time being, that is not going to be the allowable ceiling of risks you can take. Can I have that sense?

Speaker #3: So I'd like to ask you to elaborate on the capacity of risk taking . Sato San , thank you for your questions . Firstly , your first question .

Hiroyuki Moriuchi: Sato-san, thank you for your questions. Firstly, your first question, equities. What was the equities performance in each region, and what is the extent of sustainability moving forward? This time for the US side, the material might not have mentioned it, but in Q1, the Americas has been the driver of revenue, and strength continues in Americas, although that's not specifically mentioned. On the other hand, for Asia and Japan, compared to Q1 on a Q-on-Q basis. Now, Q2 results.

Speaker #3: Equities . What was the equities performance in each region and what is the extent of sustainability ? Moving forward ? This time for the for the US , I might not have that material , might not have mentioned it .

[Company Representative]: This time for the U.S., I might not have the material, might not have mentioned it, but in the first quarter, the Americas has been the driver of revenue and the strength continues in Americas, though that's not specifically mentioned. On the other hand, for Asia and Japan, compared to the first quarter on a Q-on-Q basis, now second quarter results came in stronger. Overall, equities in AEJ, Japan, and U.S.A., the performance was very strong. To what extent, for how long can we retain this strength? If equities continues to be this strong, sometime down the road there will be a point of normalization. That's what we are discussing internally. As you are aware, not only in Japan but in U.S.A. and Asia, we have geographical diversification and within equities we have various products.

Speaker #3: But in the first quarter, the Americas has been the driver of revenue, and the strength continues in the Americas, though that's not specifically mentioned.

Speaker #3: On the other hand, for Asia and Japan, compared to the first quarter on a Q/Q basis, the second quarter results came in stronger overall, particularly in equities in Japan and the USA.

[Company Representative] (Nomura Holdings): Came in stronger. Overall, equities in AEJ, Japan and USA, the performance was very strong. To what extent, for how long can we retain this strength? If equities continues to be this strong, sometimes, sometime down the road there will be a point of normalization. That's what we are discussing internally. As you are aware, not only in Japan, but in USA and Asia, we have geographical diversification. Within equities, we have various products. The last several years, we have worked to diversify and broaden the product range within equities. In that sense, we are more tolerant or resistant against downside risk. In any case, equities have become stronger.

Speaker #3: The performance was very strong. Then, to what extent and for how long can we retain this strength? If equities continue to be this strong, then sometime down the road there will be a point of normalization.

Speaker #3: That's what we are discussing internally. But, as you are aware, not only in Japan but also in the USA and Asia, we have geographical diversification.

Speaker #3: And within equities, we have various products. In the last several years, we have worked to diversify and broaden the product range within equities.

[Company Representative]: The last several years we have worked to diversify and broaden the product range within equities. In that sense, we are more tolerant or resistant against downside risk. In any case, equities have become stronger. Moving forward, we expect certain normalization. In such situation, resource could be resource fixed income resource which we had intentionally reduced could go up for macro and other fixed income. I encourage you to take a look at the entirety of the portfolio. Regarding your second question, target range from 11 to 14%. After Macquarie closing, the ratio is around 12%. What is the future capacity of risk taking? That's what you asked about. It is a good point you made. Firstly, regarding wholesale, stringently they are sticking to the self funding concept as they grow their business, so self sustaining growth is being driven.

Speaker #3: So in that sense , we are more tolerant or resistant against downside risk in any case , equities have become stronger . So moving forward we expect certain normalization .

[Company Representative] (Nomura Holdings): Moving forward, we expect certain normalization, but in such situation, resource could be resource, fixed income resource, which we had intentionally reduced, could go up for macro and other fixed income. I encourage you to take a look at the entirety of the portfolio. Regarding your second question, target range from 11% to 14% after Macquarie closing, the ratio is around 12%. What is the future capacity of risk-taking? That's what you asked about. It is a good point you made. Firstly, regarding wholesale, stringently they are sticking to the self-funding concept as they grow their business. Self-sustaining growth is being driven.

Speaker #3: But in such a situation, resources could be in resource fixed income, which we had intentionally reduced, and could go up for macro and other fixed income.

Speaker #3: So, I encourage you to take a look at the entirety of the portfolio. And regarding your second question, the target range is from 11% to 14%. After Macquarie, the closing ratio is around 12%.

Speaker #3: So what is the future capacity of risk taking ? That's what you asked about . So it is a good point . You made .

Speaker #3: But firstly regarding wholesale . So stringently they are sticking sticking to the self-funding concept as they grow their business . So self-sustaining growth is being driven .

Speaker #3: So, in the third and fourth quarters, if wholesale continues to perform as strongly, then based upon the revenue and profit generated by wholesale and based upon the capital that is expected to be accumulated, RWA headroom or capacity will be increased.

[Company Representative]: In the third and fourth quarters, if wholesale continues to perform strongly, then based upon the revenue and profit generated by wholesale and based upon the capital accumulated to be accumulated, RWA headroom or capacity will be increased. On the other hand, for areas other than wholesale, we have the question of whether we find the need for capital in the near term future. If there are opportunities for M&A or inorganic growth, then in a step change manner resource may be grown. In any case, it's going to be immediately after Macquarie transaction. When it comes to finance, we would like to stay on the safe side and we would like to be conservative to a certain extent and we want to take a look at the balance. I hope I answered your question. Thank you very much for the clear explanation.

[Company Representative] (Nomura Holdings): In Q3 and Q4, if wholesale continues to perform strongly, based upon the revenue and profit generated by wholesale and based upon the capital accumulated, to be accumulated, RWA headroom or capacity will be increased. On the other hand, for areas other than wholesale, we have the question of whether we find the need for capital in the near-term future. If there are opportunities for M&A or inorganic growth, in a step change manner, resource may be grown. In any case, it's going to be immediately after Macquarie transaction. When it comes to finance, we would like to stay on the safe side, and we would like to be conservative to a certain extent, and we want to take a look at the balance. I hope I answered your question.

Speaker #3: On the other hand, for areas other than wholesale, we have the question of whether we find a need for capital in the near-term future.

Speaker #3: But if there are opportunities for M&A or inorganic growth , then in a step change manner , resource may . Be grown . But in any case , it's going to be immediately after Macquarie transaction .

Speaker #3: So when it comes to finance , we would like to stay on the safe side . And we would like to be a conservative to a certain extent , and we want to take a look at the balance .

Speaker #3: I hope I answered your question. Thank you very much for the clear explanation.

Koki Sato: Thank you very much for the clear explanation.

Speaker #2: The next question is from Morgan Stanley , Mitsubishi UFJ securities Nagasaka Nagasaki . Please go ahead . Thank you . This is Nagasaki .

Hiroyuki Moriuchi: The next question is from Morgan Stanley MUFG Securities, Nagasaka san. Nagasaka san, please go ahead. Thank you. This is Nagasaka. Two questions on slide 14. Investment banking in the second half and next year, how do you think about the pipeline towards the future? In Q2, Japan was strong, International also recovered and according to your explanation, corporate actions will remain strong. What about advisory finance solutions? Could you add some comments by product, please, is my first point. My second question is regarding the ROE in Q2, 10.6% ROE on a full year basis and there were some one-off items but even so, 10.6%. What is the base ROE which you can achieve?

Hiroyuki Moriuchi: The next question is from Morgan Stanley MUFG Securities, Nagasaka-san. Nagasaka-san, please go ahead. Thank you. This is Nagasaka. 2 questions. On slide 14, investment banking. In H2 and next year, how do you think about the pipeline towards the future? In Q2, Japan was strong, international also recovered. According to your explanation, corporate actions will remain strong. What about advisory, finance, solutions? Could you add some comments by product, please? Is my first point. My second question is regarding the ROE. In Q2, 10.6% ROE on a full year basis, and there were some one-off items, but even so, 10.6%. What is the base ROE which you can achieve? I think, I guess the base ROE has gone up quite a bit.

Speaker #2: Two questions . On slide 14 , investment banking . In the second half and next year , how do you think about the pipeline towards the future in Q2 ?

Speaker #2: Japan was strong. International also recovered, and according to your explanation, corporate actions will remain strong. So, what about advisory finance solutions?

Speaker #2: Could you add some comments by product , please ? Is my first point . My second question is regarding the ROE . In Q2 , 10.6% ROE on a full year basis and there were some one off items .

Speaker #2: But even so , 10.6% . So what is the base ROE which you can achieve ? I think I guess the base ROE has gone up quite a bit and your target 2030 target of 8 to 10% plus , what is the and I guess your expected profit level to achieve that is going up .

Hiroyuki Moriuchi: I think the base ROE has gone up quite a bit and your 2030 target of 8 to 10% plus, what is the, and I guess your expected profit level to achieve that is going up. Are you going to reconsider the target profit level at this stage? Any thoughts on the upside downside as CFO, please. Thank you for your question. This is Moriuchi. Regarding your first question about the pipeline by product, first of all for advisory in Japan there are some cross-border opportunities and large opportunities and quite a lot of opportunities are building up in the pipeline. For International, it depends on the region but we have announced many deals and also in the second half there are some deals which we haven't announced which is building up as well. For advisory, the pipeline is building up quite nicely.

Hiroyuki Moriuchi: Your target 2030 target of 8% to 10%+, and I guess your expected profit level to achieve that is going up. Are you going to reconsider the target profit level at this stage? Any thoughts on the upside, downside as CFO, please? Thank you for your question. This is Moriuchi. Regarding your first question about the pipeline by product. First of all, for advisory in Japan, there are some cross-border opportunities and large opportunities, and quite a lot of opportunities are building up in the pipeline. For international, it depends on the region, but we have announced many deals, and also in H2 there are some deals which we haven't announced, which is building up as well. For advisory, the pipeline is building up quite nicely.

Speaker #2: So, are you going to reconsider the target profit level at this stage? Any thoughts on the upside downside? As CFO, please?

Speaker #2: Thank you for your question . This is moriuchi . Regarding your first question about the pipeline . Byproduct . First of all , for advisory in Japan .

Speaker #2: There are some cross-border opportunities and large opportunities . And quite a lot of opportunities are building up in the pipeline . And for international , it depends on the region .

Speaker #2: But we have announced many deals. And also, in the second half, there are some deals that we haven't announced, which are building up as well.

Speaker #2: And for advisory , the pipeline is building up quite nicely . Meanwhile , for ECM . The fee pool is normalizing and shrinking somewhat and there are some normalizations of the cross-shareholdings opportunities , but even for the reduction of cross-shareholdings that seems to be picking up slightly .

Hiroyuki Moriuchi: Meanwhile, for ECM the fee pool is normalizing and shrinking somewhat and there are some normalizations of the cross-shareholdings opportunities. Even for the reduction of cross-shareholdings, that seems to be picking up slightly. In the second half.

Hiroyuki Moriuchi: Meanwhile, for ECM, the fee pool is normalizing and shrinking somewhat. There are some normalizations of the cross-shareholdings opportunities, but even for the reduction of cross-shareholdings, that seems to be picking up slightly. In H2, usually it's H2 that corporate actions tend to be concentrated versus H1 in this product. We'll make sure to pitch and win these opportunities. For DCM, the business remains strong. For H2, as rates are expected to go up, but we are expecting a certain level of deal flow. Advisory, very strong. DCM, we expect a similar level to continue. For ECM, compared to a typical year, it's a bit weak, but we expect some recovery would be the summary. Your second question regarding ROE. In Q1, Q2, and based on the results, we are already booking more than 10% ROE.

Speaker #2: And in the second half, usually it's the second half that corporate actions tend to be concentrated versus the first half in this product.

[Company Representative]: Usually it's.

Hiroyuki Moriuchi: The second half, that corporate actions tend to be concentrated versus first half, have in this product. We'll make sure to pitch and win these opportunities. For DCM, the business remains strong, and for the second half, as rates are expected to go up, we are expecting a certain level of deal flow. Advisory is very strong. DCM is, we expect a similar level to continue. For ECM, compared to a typical year, it's a bit weak, but we expect some recovery would be the summary. Your second question regarding ROE and in Q1, Q2, and based on the results, we are already booking more than 10% ROE. So are we not going to raise the level? Is your question. Yes, as you pointed out, if we look at the current earnings, our base earnings power is gradually improving.

Speaker #2: So, we'll make sure to pitch and win these opportunities. And for DCM, the business remains strong. And for the second half.

Speaker #2: As rates are expected to go up . But we are expecting a certain level of deal flow advisory , very strong DCM is we expect a similar level to continue for ECM compared to a typical year .

Speaker #2: It's a bit weak , but we expect some recovery would be the summary . Your second question regarding Roe . And in Q1 , Q2 and based on the results , we are already booking more than 10% ROE .

Speaker #2: So are we not going to raise the level ? Is your question . And yes , as you pointed out , if we look at the current earnings , our base earnings power is gradually improving .

Hiroyuki Moriuchi: Are we not going to raise the level, is your question. Yes, as you pointed out, if we look at the current earnings, our base earnings power is gradually improving. This is a result of portfolio reforms as well as the operational reforms at each business division, and those are leading to results. In terms of ROE, we get a lot of inquiries about whether we are going to reconsider and revise it, and we are discussing a little bit internally. The point here is that which part of the cycle we are in right now, that's something we need to be mindful of. Regardless of the economic cycle, we want the products in wholesale to offset each other so that we can maintain the overall revenue level. That's the kind of portfolio we are aiming for.

Speaker #2: This is a result of portfolio reforms as well as the operational reforms at each business division. And those are leading to results.

Hiroyuki Moriuchi: This is a result of portfolio reforms as well as the operational reforms at each business division, and those are leading to resources results. In terms of ROE, we get a lot of inquiries about whether we are going to reconsider and revise it, and we are discussing a little bit internally. The point here is that which part of the cycle we are in right now, that's something we need to be mindful of. Regardless of the economic cycle, we want the products in wholesale to offset each other so that we can maintain the overall revenue level. That's the kind of portfolio we are aiming for. If we are going to enter a slowdown, it's something we need to consider. Even in that case, we want to maintain at least the 8%, which is the lower end of the range of 8 to 10%.

Speaker #2: So in terms of Roe , we get a lot of inquiries about whether we are going to reconsider and revise it . And we are discussing a little bit internally , but the point here is that which part of the cycle we are in right now , that's something we need to be mindful of .

Speaker #2: And regardless of the economic cycle, we want the products in wholesale to offset each other so that we can maintain the overall revenue level.

Speaker #2: That's the kind of portfolio we are aiming for. But if we are going to enter a slowdown, it's something we need to consider.

Mia Nagasaka: If we are going to enter a slowdown, is something we need to consider. Even in that case, we want to maintain at least the 8%, which is the lower end of the range of 8% to 10%. We are currently building up the earnings capability, and that's what we should be focusing on at the moment. Hope that answers your question. Yes. Thank you. Understand.

Speaker #2: And even in that case, we want to maintain at least the 8%, which is the lower end of the range of 8% to 10%.

Speaker #2: And we are currently building up the earnings capability, and that's what we should be focusing on at the moment. Hope that answers your question.

Hiroyuki Moriuchi: We are currently building up the earnings capability, and that's what we should be focusing on at the moment. Hope that answers your question. Yes, thank you. Understand.

Speaker #2: Yes. Thank you. Understand?

Speaker #1: If you have a question , press sharp seven . If you have a question , press sharp seven . There is no more question .

Operator: If you have a question, press 7. If you have a question, press 7. As there is no more question, we'd like to conclude question and answer session now. We'd like to make closing address. Nomura Holdings Inc.

Operator: If you have a question, press sharp 7. As there is no more question, we'd like to conclude question and answer session. Now, we'd like to make closing address by Nomura Holdings.

Speaker #1: We'd like to conclude the question and answer session. Now we'd like to make a closing address by Nomura Holdings Inc.

Speaker #3: Thank you . This is Morici again . Thank you very much for attending the call . Despite your tight schedule . So we were able to show you the good result in that we still have third quarter and fourth quarter remaining .

[Company Representative]: Thank you. This is Hiroyuki Moriuchi again. Thank you very much for attending the call despite your tight schedule. We were able to show you the good result. We still have third quarter and fourth quarter remaining. We will stay focused so that we can deliver results. The management members will keep making efforts. Thank you very much for your continued support. Thank you.

Hiroyuki Moriuchi: Thank you. This is Hiroyuki Moriuchi again. Thank you very much for attending the call despite your tight schedule. We were able to show you the good result. We still have Q3 and Q4 remaining, we will stay focused so that we can deliver results. That we can do so, the management members will keep making efforts. Thank you very much for your continued support. Thank you.

Speaker #3: So we will stay focused so that we can deliver results, as we can do so. The management members will keep making efforts.

Speaker #3: Thank you very much for your continued support. Thank you.

Operator: Thank you for taking your time. That concludes today's conference call. You may now disconnect your lines.

Operator: Thank you for taking your time, and that concludes today's conference call. You may now disconnect your lines.

Hiroyuki Moriuchi: Sam Sa.