Nomura Holdings Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Nomura Holdings Inc's Q2 2026 earnings call highlighted steady growth, with a focus on recurring revenue streams, cost management, and strategic initiatives in Wealth Management, Investment Management, and Wholesale divisions. The call also addressed the impact of fraudulent trading and provided insights into the company's capital allocation and future outlook.
Key Financial Results
Group-wide net revenue was ¥515.5 billion, a 2% decrease from the previous quarter.
Income before income taxes decreased by 15% to ¥136.6 billion.
Net income decreased by 12% to ¥92.1 billion.
Excluding real estate sale gains from the previous quarter, net revenue increased by 10%, and net income increased by 40%.
Earnings per share for the quarter were ¥30.49, and return on equity was 10.6%.
Income before income taxes in the three international regions increased by 63% to ¥44.9 billion.
Income before income taxes for all four divisions rose 25% to ¥132.6 billion.
For the first half of the fiscal year, income before income taxes rose 26% year-on-year to ¥296.9 billion.
Net income for the first half rose 18% to ¥196.6 billion, with earnings per share at ¥64.53.
Return on equity for the first half rose to 11.3%.
Group revenue for the first half rose by 11%.
Business Segment Results
Wealth Management net revenue increased 10% to ¥116.5 billion, and income before income taxes grew 17% to ¥45.5 billion.
Investment Management net revenue came to ¥60.8 billion, up 20%.
Investment Management income before income taxes amounted to ¥30.7 billion, up 43%.
Wholesale net revenue came to ¥279.2 billion, up 7%.
Global Markets net revenue within Wholesale was up 6%, and Investment Banking net revenue was up 15%.
Banking net revenue came to ¥12.9 billion, flat from the previous quarter.
Banking income before income taxes fell 12% to ¥3.2 billion.
Capital Allocation
The company expects to pay a dividend of ¥27 per share for the period ended September 2025.
This dividend payout ratio is 40.3%.
The company is committed to a 40% dividend payout ratio or above and a total payout ratio of 50% or above.
Industry Trends and Dynamics
Major equity markets rose to fresh highs during the quarter, increasing client activity and flow revenue in Wealth Management.
There was continued strong demand for long-term investment diversification.
The flow from savings to investment has become well-established, broadening the client base for investment in marketable securities.
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.
Competitive Landscape
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.
Nomura aims to reinforce its brand as the most trusted partner for its clients by implementing high-quality security countermeasures and being proactive in assembling effective account security measures.
Macroeconomic Environment
The relatively high US interest rate environment has influenced insurance sales.
Uncertainty over the trajectory of US interest rates and widespread interest in AI-related stocks and other high-tech stocks influenced stock indices in Japan and other major economies.
Growth Opportunities and Strategies
Nomura is focused on expanding stable revenue sources, including recurring revenue in Wealth Management, business revenue in Investment Management, and net revenue in Banking.
Wholesale is steadily achieving independently sustainable growth under the self-funding approach.
The company is preparing for the introduction of a deposit sweep service in FY 2026-2027.
Nomura is working to transform Japan into an asset management powerhouse by building relationships of trust with clients and providing tailored asset management services.
The company is strengthening measures to eliminate damages from phishing attempts, including the introduction of a passkey authentication system.
Financial Guidance and Outlook
Nomura aims to raise its profit baseline by taking on risks appropriate to market conditions.
In Wealth Management, net revenue thus far in October is well above the levels observed in the second quarter.
In Wholesale GM business, Equity Products have continued performing well, and in Investment Banking, the company expects the current high frequency of corporate actions to continue.
Net revenue in Wholesale continues to be solid in October thus far.
The company expects that the impact of phishing scams will be much smaller than it has been up through the second quarter.
The company is discussing internally whether to reconsider and revise the ROE target, considering the current earnings and improving base earnings power.
