Nomura Holdings, Inc. today reported its consolidated financial results for the first quarter of the fiscal year ending March 31, 2011.
Nomura booked first quarter net revenue of 259.8 billion yen (US$2.94 billion)(1), income before income taxes of 6.5 billion yen (US$73 million), and net income attributable to Nomura Holdings of 2.3 billion yen (US$26 million).
"We remained profitable in the quarter despite the difficult market environment. Our retail and asset management businesses reported another quarter of solid results as we accurately responded to the needs of our clients," said Kenichi Watanabe, President and CEO of Nomura.
"Although revenues in our wholesale business declined due to the adverse market conditions, we saw further growth in our client franchise and flow businesses. Looking ahead, we will continue to build out our revenue base by maintaining our focus on client businesses and supplying liquidity to our clients backed by our robust financial position."
Retail
Net revenue in Retail was 111 billion yen and income before income taxes was 37.7 billion yen.
Retail client assets increased by 1.29 trillion yen as Nomura continued to provide client-focused consulting services and diversified its product offering. Investment trusts saw particularly strong inflows of 438 billion yen. Nomura's retail client base continued to grow with the number of accounts increasing to 4.89 million.
Asset Management
Net revenue in Asset Management was 18.1 billion yen and income before income taxes was 4.9 billion yen. First quarter net asset inflows were 555 billion yen, representing stronger inflows than each quarter last fiscal year. Mandates from institutional investors outside Japan, primarily for Japanese and Asian equities and global bonds, also increased steadily.
Wholesale
On April 1, Nomura created a new Wholesale division by integrating the Global Markets, Investment Banking, and Merchant Banking divisions. First quarter net revenue in Wholesale was 108.6 billion yen and loss before income taxes was 41.1 billion yen.
Global Markets revenues declined from the prior quarter due to subdued client activity industry-wide and an adverse impact from the tough market environment. However, Nomura continued to make steady progress in its strategy of building out its global client franchise. The number of active clients increased for the fifth straight quarter and client revenues remained robust.
In Investment Banking, a number of deals in the pipeline were postponed due to the adverse market conditions, leading to a decline in revenues. Despite the slower environment, Nomura maintained its leading market share across products in Japan and worked on high-profile cross-border deals. Notably, Nomura advised Grifols, a Spanish company specializing in the hospital-pharmaceutical sector, on its 4 billion dollar acquisition of Talecris, a US-based biotherapeutic company.
Financial position
Nomura maintains a robust financial position and clean balance sheet. As of the end of June, Nomura's total capital ratio was 23.3 percent and its Tier 1 ratio was 16.9 percent. Nomura had total assets of 33.9 trillion yen and shareholders' equity of 2.1 trillion yen. Gross leverage was 16.1 times and net leverage was 10.1 times. All figures are shown on a preliminary basis.
(1) US dollar amounts are included solely for the convenience of the reader and have been translated at the rate of 88.49 yen = 1 US dollar, the noon buying rate in New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York on June 30, 2010. This translation should not be construed to imply that the yen amounts actually represent, or have been or could be converted into, equivalent amounts in US dollars.