Nomura Holdings, Inc. announced its consolidated financial results for the third quarter of the fiscal year ending March 31, 2015. Net revenue was 425 billion yen ($3.5 billion), an increase of 14 percent quarter on quarter and 12 percent year on year.
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Income before income taxes was 116.1 billion yen ($969 million), up 57 percent quarter on quarter and 34 percent year on year. Net income grew 32 percent quarter on quarter and 45 percent year on year to 70 billion yen ($584 million).
Retail net revenue increased 9 percent quarter on quarter and 1 percent year on year to 128.8 billion yen. Income before income taxes was 50.5 billion yen, up 30 percent from last quarter and 6 percent over last year. Retail reported robust sales of stocks during the quarter on the back of a market rally, driven by monetary easing by the Bank of Japan and an uptick in primary deals.
Discretionary investment net inflows and sales of insurance products were at the highest level since Nomura started transforming its Retail business model. Retail client assets climbed to a record 104.8 trillion yen at the end of December. Recurring revenue was 16.6 billion yen for the quarter, or 65.7 billion yen on an annualized basis, putting Nomura within reach of its March 2016 target of 69.6 billion yen.
Asset Management net revenue rose 8 percent from last quarter and 10 percent year on year to 23.4 billion yen. Income before income taxes increased 20 percent quarter on quarter and 5 percent year on year to 9.3 billion yen. Assets under management reached a record 37.7 trillion yen on inflows into products for discretionary investments and support from market factors.
In the investment trust business, Nomura reported inflows mainly into funds seeking income gain and funds for discretionary investments. Assets under management in Fund Wrap and SMA funds grew strongly, while sales of privately placed funds remained firm. In the investment advisory business, Nomura’s international business continued to grow through UCITS compliant funds. The company expanded its distribution channels in terms of regional coverage and client type, as evidenced by winning new mandates from pension funds in Chile and Mexico.
Wholesale booked net revenue of 178.9 billion yen, down 6 percent from last quarter and 5 percent from the third quarter last year. Income before income taxes decreased 98 percent both quarter on quarter and year on year to 500 million yen. In Global Markets, Japan and AEJ had a good quarter. AEJ reported its highest quarterly revenues since April 2009 as Nomura continued to expand its client franchise, particularly in emerging markets.
In Fixed Income, Japan Rates and AEJ FX performed well, while Rates and Credit in EMEA and the Americas had a challenging quarter as lower yields had heightened volatility. The Equities Cash business had a solid quarter on a rebound in market volumes globally.
Nomura maintains a robust financial position and a healthy balance sheet. As of the end of December, Nomura’s total capital ratio was 14.3 percent and its Tier 1 ratio was 12.5 percent under Basel III. Nomura had total assets of 44.1 trillion yen and shareholders’ equity of 2.7 trillion yen. Gross leverage was 16.2 times and net leverage was 10.5 times. All figures are on a preliminary basis. ■