Nomura posts fourth straight quarterly profit

TOKYO: Nomura Holdings Inc, Japan’s biggest brokerage and investment bank, yesterday posted its fourth straight quarterly profit, primarily due to a turnaround at its wholesale business serving businesses and institutional investors.

Net profit in the three months ended December came in at 57.1 billion yen ($521 million), beating one estimate of 38.94 billion yen by brokerage Mitsubishi UFJ Morgan Stanley.

Nomura, which is in the midst of a management reshuffle, had recorded a 95.3 billion yen net loss in the same period last year, its heaviest quarterly loss in nearly a decade, as it suffered a big write-off in its wholesale business.

Pre-tax income for the wholesale segment came in at 43.2 billion yen for the three months through December compared with a 95.9 billion yen pre-tax loss a year ago.

The retail division posted 17.6 billion yen in pre-tax income, up 26% from a year earlier, as market conditions improved, Nomura said.

Japan’s benchmark Nikkei share average rose about 8.1% in the three months through December.

“The results were partly supported by market recovery. There are still things that we can do to get our business back at cruising speed,” chief financial officer Takumi Kitamura said at an earnings briefing.

“Nomura has been in a heavy cost-cutting mode for the past year and is aiming for about 140 billion yen in cost cuts by March 2022, with close to 70% of that achieved as of end-December,’’ he said.

The investment bank has announced it is promoting joint chief operating officer (COO) Kentaro Okuda as its new chief executive officer, replacing Koji Nagai, its longest-serving CEO in three decades, who will become chairman.

The changes are effective April 1. Okuda in December pledged to speed up the pace of reform at Nomura.

“Although the cost cut has been done relatively smoothly so far, (Nomura’s) retail division reform is one of challenges lying ahead,” said Toshihiro Matsuo, an analyst at S&P Global Ratings in Tokyo.

“I am looking closely at how Nomura deals with the cost reduction while maintaining profitability.”

Nomura also announced that joint COO Toshio Morita would become the group’s representative executive officer in April and remain as a head of the core unit Nomura Securities, adding that it would abolish the COO position.