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01/11 16:22
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with record high recurring revenue, increased net income, and a robust share buyback program. Despite some risks like market volatility and increased expenses, the positive factors such as strong wholesale revenue outlook and asset management growth outweigh the negatives. The Q&A section confirms strong market positions and opportunities, particularly in securitization and wealth management, supporting the positive sentiment. Therefore, the stock is likely to see a positive movement in the next two weeks.
Group-wide net revenue ¥454.4 billion, up 2% over last quarter.
Pre-tax income ¥102.9 billion, grew 12%.
Net income ¥68.9 billion, an increase of 21% compared to last quarter.
EPS ¥22.36.
Annualized ROE 8.1%.
Wealth Management net revenue ¥114 billion, increased 5%.
Wealth Management income before income taxes ¥42.3 billion, gained 9%.
Recurring revenue ¥45.8 billion, at record high.
Investment management net revenue ¥47.7 billion, increased 9%.
Investment management income before income taxes ¥23.2 billion, up 31%.
Stable business revenue ¥39.1 billion, a record quarterly high.
Assets under management ¥92.5 trillion, sixth straight quarter record high.
Wholesale net revenue ¥244.8 billion, slipped 4%.
Global Markets net revenue ¥207.7 billion, increased 2%.
Investment banking net revenue ¥37.2 billion, slowed 25%.
Group-wide expenses ¥351.5 billion, roughly flat.
Compensation and benefits ¥184.5 billion, increased 4%.
Other expenses ¥43.4 billion, dropped 25%.
Tier 1 capital ¥3.5 trillion, up by about ¥70 billion.
Risk-weighted assets ¥20 trillion, increased ¥1.3 trillion.
Tier 1 capital ratio 17.4%.
CET1 capital ratio 15.6%.
Wealth Management Net Revenue: Increased 5% to ¥114 billion, highest levels in 9 years.
Investment Trust Sales: Up 27%, indicating strong growth in sales of products.
Discretionary Investment Contracts: Grew by 16%, reflecting increased client engagement.
Insurance Products Sales: Increased by 38%, showcasing robust demand.
Assets Under Management: Reached a record high of ¥92.5 trillion, sixth straight quarter of growth.
Nikkei Average Performance: Underwent significant correction, impacting investor sentiment.
New Accounts Opened: High-net-worth clients continue to open new accounts despite market fluctuations.
Recurring Revenue Cost Coverage Ratio: Improved to 64%, indicating operational efficiency.
Non-Personnel Expenses: Kept down, contributing to higher recurring revenue.
Reorganization Impact: Large-scale reorganization last spring led to improved results in Wealth Management.
Diversification of Revenue Sources: Wholesale income diversified with strong performance in Spread Products.
Market Volatility: The Nikkei average has recently undergone a significant correction, leading to investor caution due to yen strengthening and declines in U.S. tech stocks.
Regulatory and Economic Factors: Expectations of volatility in the market over the U.S. presidential election and monetary policy by central banks globally may impact business activities.
Wholesale Performance: Wholesale performance still has room for improvement, particularly in investment banking, which saw a 25% decline in net revenue from the previous quarter.
Cost Management: Compensation and benefits increased by 4% due to yen depreciation and severance-related expenses, indicating potential challenges in managing costs.
Credit and Market Risk: Risk-weighted assets increased due to credit risk from yen depreciation and market risk from lower yen, which may affect financial stability.
2030 Numerical Target: Nomura aims to consistently achieve a Return on Equity (ROE) of 8% to 10% or more by 2030.
Wealth Management Reorganization: The Wealth Management segment has seen positive results from a large-scale reorganization and a segment-based approach.
Diversification of Revenue Sources: Nomura is making progress in diversifying and stabilizing its revenue sources across various business lines.
Asset Management Growth: Investment management is delivering steady growth in its asset management business, with record high assets under management.
Q1 2025 Net Revenue: Group-wide net revenue for Q1 2025 was ¥454.4 billion, up 2% from the previous quarter.
Q1 2025 Pre-tax Income: Pre-tax income for Q1 2025 grew 12% to ¥102.9 billion.
Q1 2025 Net Income: Net income for Q1 2025 was ¥68.9 billion, an increase of 21% compared to the previous quarter.
Annual Target for Recurring Revenue Assets: Nomura aims for net inflows of recurring revenue assets to reach ¥800 billion for the fiscal year.
Wholesale Revenue Outlook: Wholesale revenues in July are trending substantially higher than first quarter revenues, with expectations for volatility in the market.
Share Buyback Program: Nomura Holdings announced a share buyback program of ¥50 billion, aimed at enhancing shareholder returns.
The earnings call shows strong year-on-year financial growth, but quarter-on-quarter declines in key metrics raise concerns. The Q&A reveals weak fixed income performance and unclear management responses, which could worry investors. The 60 billion yen buyback and dividend are positives, but not enough to offset the mixed financial performance and cautious market outlook. Overall, the sentiment is neutral with a slight negative bias due to uncertainties and lack of clear guidance.
Despite strong annual financial growth, the quarterly decline in key metrics and cautious management responses temper enthusiasm. The Q&A revealed uncertainties, especially in fixed income performance and resource allocation. The announced share buyback is positive, but unclear capital ratio targets and high costs in wholesale raise concerns. The overall sentiment is neutral, balancing strong yearly results with quarterly setbacks and management's cautious outlook.
The earnings call summary indicates strong financial performance with significant increases in net income, pre-tax income, and ROE. Despite a decrease in assets under management, other metrics such as investment management income and wholesale revenue have shown robust growth. The Q&A session reveals management's confidence in sustaining performance in wealth management and ECM, despite no share buyback. Additionally, cost-saving measures are being implemented, and the dividend payout ratio is high. These factors suggest a positive outlook, likely resulting in a 2% to 8% stock price increase over the next two weeks.
The earnings call reveals strong financial performance with record high recurring revenue, increased net income, and a robust share buyback program. Despite some risks like market volatility and increased expenses, the positive factors such as strong wholesale revenue outlook and asset management growth outweigh the negatives. The Q&A section confirms strong market positions and opportunities, particularly in securitization and wealth management, supporting the positive sentiment. Therefore, the stock is likely to see a positive movement in the next two weeks.
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