Nomura Holdings Inc Earnings - Q4 2025 Analysis & Highlights
Nomura Holdings Inc.'s Q3 2026 earnings call highlighted strong financial performance across its four main divisions, with significant growth in Wealth Management and record revenues in Wholesale's Equities and Investment Banking. The company also announced a share buyback program and discussed the impact of the Macquarie Group acquisition and volatility in digital asset-related businesses.
Key Financial Results
Return on equity was 10.3% for Q3, marking the seventh consecutive quarter of meeting or exceeding the 2030 target of 8% to 10% or more.
Group-wide net revenue reached ¥51.8 billion, an increase of 7% over the previous quarter.
Income before income taxes decreased by 1% to ¥135.2 billion.
Net income also fell by 1% to ¥91.6 billion.
Earnings per share (EPS) for the quarter were ¥30.19.
For the first nine months of the fiscal year, income before income taxes rose 15% year-on-year to ¥432.1 billion.
Net income for the nine months increased 7% to ¥288.2 billion.
EPS for the nine months was ¥94.67.
Return on equity for the nine months was 10.8%.
Group-wide expenses totaled ¥416.5 billion, a 10% or ¥37.7 billion increase from the previous quarter.
Business Segment Results
Wealth Management net revenue increased 14% to ¥132.5 billion, with income before income taxes growing 29% to ¥58.5 billion.
Investment Management net revenue was flat at ¥60.9 billion, and income before income taxes grew 42% to ¥17.9 billion.
Wholesale net revenue rose 12% to ¥313.9 billion, and income before income taxes increased 17% to ¥62.3 billion.
Banking net revenue came to ¥13.7 billion, up 7% from the previous quarter, with income before income taxes rising 31% to ¥4.2 billion.
The segment Other incurred losses due to a downturn in market conditions for digital asset-related businesses.
Wealth Management achieved growth of around 30% versus the previous quarter.
Investment Management saw business revenue rise to an all-time high since the division's establishment, benefiting from the consolidation of Macquarie Group's public asset management business.
Wholesale's Equities and Investment Banking performed solidly, generating record revenues.
Banking generated solid revenues from lending activities, trust, and agent services.
Investment Management's profits fell due to weaker investment gains and one-time expenses associated with the Macquarie acquisition.
Global Markets net revenue rose 9%, while Investment Banking net revenue rose 31%.
Fixed income revenue in Global Markets rose 12% to ¥136.9 billion.
Equities revenue in Global Markets rose 5% to a new high of ¥119.9 billion.
Investment Banking net revenue rose 31% to ¥57.1 billion, marking its strongest performance since the fiscal year ended March 2017.
Capital Allocation
A share buyback program was resolved to enhance shareholder return and capital efficiency.
The program will run from February 17 to September 30 with an upper limit of 100 million shares and ¥60 billion in amount.
The decision on the buyback timing was influenced by the clarification of the CET1 ratio impact after the Macquarie US asset management transaction closed on December 1.
Industry Trends and Dynamics
The shift from savings to investment has firmly taken root.
Client sentiment has been favorable, and household financial assets are steadily shifting into investment due to concerns about inflation and heightened long-term diversified investment needs.
The Japanese market retail investors are making a major shift from savings into investment, which is seen as a sustainable trend.
Competitive Landscape
Nomura's Wealth Management has 100% in-house sales, which makes it easier to control costs.
The company is considering what are the best solutions for customers and focuses on value provision.
Macroeconomic Environment
Economic and market conditions, political events, and investor sentiments are factors that can cause actual results to differ from projections.
Liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, and security valuations are also influential factors.
Market movements in October and November of last year negatively impacted earnings at Laser Digital.
Volatility in the market, particularly with super long bond rates going up, has led some clients to adopt a wait-and-see attitude in the Japan rates business.
Growth Opportunities and Strategies
Investment Management operations continued to generate organic growth, broadening the division's business foundations for future growth.
The company aims to capture growth in crypto markets while strengthening services and customer base.
The Macquarie acquisition is expected to maximize synergies between existing and newly acquired businesses to grow profits.
The company is investing in AI to improve services provided to customers.
The company is exploring the potential to invite assets or investments into Japanese private assets.
Financial Guidance and Outlook
Income before income taxes for the nine-month period is running slightly ahead of the target of over ¥500 billion in the 2030 management vision.
Wealth Management net revenue in January is tracking about even with the Q3 level.
Global Markets is tracking broadly in line with the prior quarter, despite Q4 typically being slower due to seasonal factors.
Investment Banking has had a slightly slow start in January, but the overall pipeline is solid.
The impact on earnings from fraudulent transactions stemming from phishing scams is expected to remain very minimal.
One-off acquisition-related costs and amortization of intangible assets were recorded, bringing total expenses for the acquired business to roughly ¥11 billion.
Total future expenses of $100 million or so are expected for transfer and integration-related costs over the next two years, with the majority recognized over the one-year period starting from Q4.
The impact of deferred compensation accounting method change is expected to be about ¥8 billion in Q4, and ¥15 billion or ¥16 billion for the next year, with the impact becoming negligible the year after next.
