By: Rimi
Published on: Apr 25, 2025
TOKYO – Japan’s leading investment bank and brokerage firm, Nomura Holdings, has announced a historic milestone: its highest-ever annual profit, driven by a 27% surge in fourth-quarter net income. Despite recent market turbulence triggered by U.S. tariff announcements, Chief Financial Officer Takumi Kitamura expressed confidence in the firm’s ability to capitalize on volatility and sustain growth.
Nomura’s January-March quarter net profit soared to 72 billion yen ($501 million), up from 56.8 billion yen in the same period last year. This capped off a fiscal year where revenue expanded across all business segments—wealth management, wholesale banking, and asset management. The bank also unveiled a 60 billion yen share buyback program, signaling robust financial health and a commitment to shareholder value.
Key drivers of growth included:
Equity and foreign exchange trading: Volatility widened margins, boosting revenue.
Diversified revenue streams: Consistent performance across domestic and international markets.
Cost management: Operational efficiencies amid macroeconomic uncertainties.
Nomura’s results further solidified its leadership among Japanese securities firms, outperforming rivals like Daiwa Securities and Mizuho Securities. The bank’s annual profit underscores its resilience in a competitive landscape, even as global markets grapple with inflation, geopolitical tensions, and shifting trade policies.
While the reported results do not account for April’s market turmoil following U.S. tariff announcements, Kitamura emphasized that volatility aligns with Nomura’s strengths.
“A certain degree of volatility works in favor of our business,” Kitamura stated during an earnings briefing. He noted that while retail investors have slowed activity, there’s been no panic selling. Instead, market fluctuations have enhanced profitability in Nomura’s equities and forex divisions, with revenue trends exceeding Q1 2025 levels.
Risk Management Expertise: Decades of navigating global crises, including the 2008 financial crash.
Diverse Product Offerings: Hedging solutions and derivatives trading gain demand during uncertainty.
Global Markets Unit: Revenue spikes as institutional clients seek liquidity and advisory services.
Nomura’s $1.8 billion acquisition of Macquarie Group’s U.S. and European public asset management businesses marks its most significant overseas expansion since the Lehman Brothers purchase in 2008. Kitamura highlighted the U.S. as a “clear growth market” due to its expanding population and dynamic financial ecosystem.
Why This Deal Matters:
Asset Management Focus: Aligns with Nomura’s shift toward stable, fee-based revenue streams.
Global Ambitions: Strengthens foothold in Western markets, balancing domestic dominance.
Long-Term Vision: Confidence in U.S. equities despite short-term fluctuations.
Nomura’s acquisition of Lehman’s Asia-Pacific assets in 2008 initially strained its balance sheet, but the firm has since refined its integration strategy. The Macquarie deal reflects a more calculated approach, targeting niche sectors with high growth potential.
Japanese institutions like Nomura are increasingly prioritizing asset management to reduce reliance on transactional revenue. This sector offers:
Recurring Fees: Less vulnerability to market swings.
Demographic Tailwinds: Aging populations seeking retirement solutions.
Global Diversification: Access to cross-border investment opportunities.
Product Innovation: ESG-focused funds, AI-driven portfolios.
Client-Centric Solutions: Customized offerings for institutional and retail investors.
Technology Investments: Enhancing digital platforms for seamless client experiences.
Kitamura acknowledged that the wholesale division (investment banking and global markets) faces headwinds. Companies are delaying equity issuances and M&A deals amid April’s market instability.
“Many firms are in wait-and-see mode,” he said, citing tariff-related uncertainties and currency fluctuations.
When markets stabilize, Kitamura anticipates a rebound in:
IPO Activity: Pent-up demand from startups and mid-sized firms.
M&A Deals: Cross-border consolidation in tech, healthcare, and energy.
Debt Capital Markets: Refinancing needs amid rising interest rates.
Nomura’s record fiscal year underscores its adaptability in evolving markets. By leveraging volatility, expanding asset management, and pursuing strategic acquisitions, the firm is well-positioned for sustained growth.
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