Nomura Holdings Inc. Financial Report Analysis: Net Income Growth by 186% YoY

Business Description

Nomura Holdings Inc. operates as a global financial services group, providing a broad range of investment, financing, and related services. The company’s core business operations are divided into three main segments: Wealth Management, Investment Management, and Wholesale. Geographically, Nomura has a significant presence in Japan, the Americas, Europe, Asia, and Oceania.

Industry Position and Market Share

Nomura Holdings is a prominent player in the financial services industry, competing with global firms such as Goldman Sachs, Morgan Stanley, and UBS. The company’s market share is bolstered by its diversified service offerings and strong presence in key financial markets worldwide.

Revenue Streams and Competitive Advantage

Nomura’s revenue streams include commissions, fees from investment banking, asset management and portfolio service fees, net gains on trading, and interest and dividends. The company’s competitive advantage lies in its comprehensive service portfolio, extensive geographic footprint, and strong client relationships.

Financial Statements Analysis

Income Statement

For the second quarter of FY2024/25, Nomura reported net revenue of Y483.3 billion, a 6% increase QoQ and 31% YoY. Income before income taxes was Y133 billion, up 29% QoQ and 134% YoY. Net income attributable to shareholders was Y98.4 billion, marking a 43% QoQ increase and 186% YoY growth.

Balance Sheet

As of September 30, 2024, total assets stood at Y57.5 trillion, with total liabilities at Y54.1 trillion. Shareholders’ equity was Y3.3 trillion. The company maintained a robust financial position with a CET 1 capital ratio of 15.7% and a liquidity coverage ratio (LCR) of 224.3%.

Cash Flow Statement

The company’s cash and cash deposits increased by Y635 billion, indicating strong liquidity. Detailed cash flow information is not explicitly provided in the report.

Key Findings

Strengths

• Significant net income growth of 186% YoY.
• Strong performance across all business segments, particularly in Wealth Management and Investment Management.
• Robust financial position with high liquidity and capital adequacy ratios.

Risks

• Market volatility impacting investment gains and trading revenues.
• Potential fluctuations in international markets affecting regional performances.

Special Activities

Nomura has been focusing on growing its asset management recurring revenue business and expanding its investment management segment. The company also maintained stringent cost control measures to improve profitability.

Dividend Information

A half-year dividend per share of Y23 has been proposed.

Investment Recommendations

If Currently Holding the Stock

Given the strong financial performance and strategic initiatives to enhance profitability, it is recommended to hold the stock for continued growth potential.

If Not Currently Holding the Stock

Considering the significant net income growth and robust financial position, it is advisable to consider investing in Nomura Holdings Inc. for potential long-term gains.

Disclaimer

This analysis is based on the financial report provided and reflects the data up to the second quarter of FY2024/25. Investors should conduct their own research and consider their financial situation before making any investment decisions.