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01/11 16:18
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Group-wide net revenue JPY483.3 billion, 6% increase quarter-on-quarter.
Income before income taxes JPY133 billion, 29% increase.
Net income JPY98.4 billion, 43% increase.
EPS JPY32.26.
Annualized ROE 11.6%, at the upper limit of the 2030 target of 8% to 10%.
Three segment income before income taxes JPY122.5 billion, marking the sixth straight quarter of gains.
Wealth management net revenue JPY116.7 billion, 2% increase.
Wealth management income before income taxes JPY45.3 billion, 7% increase.
Recurring revenue JPY50.3 billion, 10% increase to a record high.
Net revenue for the first half of the fiscal year JPY937.8 billion, 31% increase year-over-year.
Income before income taxes for the first half JPY235.9 billion, 129% increase.
Net income for the first half JPY167.3 billion, 186% increase.
Investment management net revenue JPY56.1 billion, 18% increase.
Investment management income before income taxes JPY31.9 billion, 38% increase.
Stable business revenue in investment management JPY39.4 billion, record high.
Wholesale net revenue JPY263.4 billion, 8% increase.
Global markets revenues 6% increase.
Investment banking revenues 14% increase.
Wholesale income before income taxes JPY45.3 billion, 114% increase.
Cost-to-income ratio in wholesale Improved to 83%.
Group-wide expenses JPY350.3 billion, roughly flat.
Tier 1 capital JPY3.4 trillion, decrease of approximately JPY150 billion.
Risk-weighted assets Declined by JPY900 billion to JPY19.2 trillion.
Tier 1 capital ratio 17.6%.
Common equity Tier 1 ratio 15.7%.
Dividend per share JPY23, with a payout ratio of 40.6%.
Net inflows of recurring revenue assets JPY438.3 billion, further gain from the prior quarter.
Assets under management in investment management JPY88.8 trillion, down from last quarter.
Accounts with balance equity holdings 360,000 accounts, with 280,000 equity holdings accounts.
Recurring Revenue: Wealth management's asset management type business gained further ground to record a 30% increase in recurring revenue.
Investment Management: Investment management's asset management business continues to gain traction with business revenue at a record high since the division was established.
Dividend Announcement: A JPY23 dividend per share was announced for shareholders of record, as of the end of September.
Market Positioning: Nomura has diversified its revenue mix in wholesale by growing equity products and securitized products businesses.
International Expansion: All three international regions were profitable, indicating a strong global market presence.
Cost Control: Nomura maintained control of costs, with a cost-to-income ratio improving to 83% in wholesale.
Operational Efficiency: Wealth management achieved a recurring revenue cost coverage ratio of 70%, beating the March 2031 target ahead of schedule.
Strategic Focus: Nomura is focusing on diversifying revenue sources and enhancing client services in wealth management.
M&A Strategy: Asset management remains a target area for M&A, with a focus on expanding capabilities in alternatives.
Economic and Market Conditions: The company faces risks from economic and market conditions, including volatility in interest rates and currency exchange rates, which can impact performance.
Competitive Pressures: Intense competition in the selection of lead managers for ECM deals may affect the company's ability to secure profitable transactions.
Regulatory Issues: The upcoming Basel 3 regulations may impose new capital requirements, which the company is currently assessing.
Supply Chain Challenges: Market volatility and geopolitical risks have created challenges in maintaining stable operations and client confidence.
Investor Sentiment: Investor sentiment is influenced by political events, which can lead to clients adopting a wait-and-see approach, affecting transaction volumes.
Liquidity of Secondary Markets: The liquidity of secondary markets is a concern, as it can impact the company's ability to execute trades effectively.
Cost Control: Rising operational costs due to inflationary pressures pose a challenge to maintaining profitability.
Market Volatility: Recent market volatility has led to fluctuations in revenue, particularly in wealth management and investment banking segments.
Annualized ROE: Achieved an annualized ROE of 11.6%, which is at the upper limit of the 2030 quantitative target of 8% to 10%.
Dividend Payout Ratio: Announced a JPY23 dividend per share, resulting in a dividend payout ratio of 40.6%.
Recurring Revenue Growth: Recurring revenue in wealth management increased by 10% to a record high of JPY50.3 billion.
Cost Control Initiatives: Implemented cost-saving measures amounting to JPY50 billion, with ongoing efforts to improve operational efficiency.
Revenue Diversification: Diversified revenue sources in wholesale by growing equity products and securitized products.
M&A Focus: Continues to target asset management for potential M&A opportunities.
Future Revenue Expectations: Expect continued strong performance in wealth management and wholesale, despite market volatility.
Capital Policy: Considering share buybacks and evaluating CET1 ratio maximum ceiling in light of Basel 3 regulations.
Market Outlook: Anticipate a comeback in market activities in the second half of the fiscal year.
Client Acquisition Strategy: Focus on acquiring quality customers rather than maximizing the number of customers.
Investment Management: Expect ongoing inflows into products requiring investment management expertise.
Dividend per share: JPY23 per share for shareholders of record as of the end of September.
Dividend payout ratio: 40.6%
Share buyback: No share buyback was announced; the decision was based on various factors including Basel 3 regulations.
Total payout ratio commitment: Commitment to a total payout ratio of 50% or higher.
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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