NOMURA HOLDINGS INC Q4 FY2025 earnings call

Management Statement and Operational Highlights:

• Full-year Group net revenue increased 21% to 1,892.5 billion, income before income taxes grew 72% to 472 billion, net income reached a record-high 340.7 billion.
• All three main segments performed solidly, with income before income taxes for the three segments growing 80% to 426.6 billion.
• Announced a share buyback program from May 15 to December 30 with an upper limit of 100 million shares and 60 billion yen repurchase price.
• Agreed to acquire Macquarie Group’s US and European public asset management business, making Investment Management larger and more global.
• Established a new banking division leveraging banking and trust banking functions to provide diverse services.
• Achieved progress on Management Vision 2030, including consistently achieving ROE of 8% to 10% or more and generating over 500 billion yen in income before income taxes.

Segment Performance:

• Wealth Management: Full-year recurring revenue grew 30%. Fourth-quarter net revenue fell 10% to 104.5 billion yen, income before income taxes fell 20% to 37 billion yen. Full-year revenue grew 12% (around 49 billion yen in value terms) while keeping cost increases modest, with income before income taxes growing 39%. Recurring revenue cost coverage ratio for the quarter rose to 76%.
• Investment Management: Full-year business revenue grew 20%. Fourth-quarter net revenue fell 6% to 43 billion yen, income before income taxes fell 18% to 15.5 billion yen. Business revenue was a record high for the fifth straight quarter. Assets under management were down at end-March due to market factors, but alternative assets under management reached a record high of 2.6 trillion yen.
• Wholesale: Fourth-quarter net revenue fell 11% to 259.2 billion yen, income before income taxes declined 40% to 37.5 billion yen. Full-year net revenue rose 22%, expenses growth was held to 10%, and income before income taxes was 3.1 times the previous year’s level. Equities revenues rose for the fifth straight quarter, and investment banking revenues increased on contributions from EMEA.

Guidance:

• Expect to pay an ordinary dividend of 24 yen per share plus a 10 yen per share 100th anniversary commemorative dividend, total year-end dividend of 34 yen (annual dividend of 57 yen per share, payout ratio 49%).
• Share buyback program from May 15 to December 30 with upper limit of 100 million shares and 60 billion yen repurchase price.
• Management Vision 2030 targets include consistently achieving ROE of 8% to 10% or more and generating more than 500 billion yen in income before income taxes.

Risks:

• Market volatility, economic and political uncertainties.
• Liquidity of secondary markets, level and volatility of interest rates, currency exchange rates.
• Security valuations, competitive conditions, and size, number, and timing of transactions.

Question and Answer: Q: SMBC Nikko Securities’ Muraki San asked about global market trends, fixed income performance vs peers, and resource allocation between regions.

A: Takumi Kitamura responded that fixed income performance was weak due to product mix, macro factors, and region mix, and that resource allocation to Europe would be reconsidered if the trend continues.

Q: Daiwa Securities’ Watanabe San asked about the rationale for the 60 billion yen share buyback, RSU portion, and business portfolio reshuffling.

A: Takumi Kitamura explained the rationale was based on capital ratios and other indicators, RSU portion was included in the 60 billion, and there was no immediate plan to revise NRI stock holdings.

Q: BofA Securities’ Sato San asked about risk management and cost/income ratio in Wholesale.

A: Takumi Kitamura stated that risks were tightly managed, and there was room to lower the cost/income ratio through ongoing initiatives.

Q: Citi Securities’ Niwa San asked about VAR, risk asset use, and acquisition impact.

A: Takumi Kitamura said VAR was controlled due to market conditions, no decisions had been made on risk asset use, and the Macquarie acquisition was a significant step.

Q: SBI Securities’ Otsuka asked about wealth management flow revenue in April and American Century Investment performance.

A: Takumi Kitamura noted wealth management flow revenue had slowed but clients were buying on corrections, and ACI performance was mitigated by hedging but still had volatility.