Nomura Holdings, Inc. (NMR) Q4 2025 Earnings Conference Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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.
Key Financial Performance
Group net revenue 1,892.5 billion yen, increased by 21% year-on-year.
Income before income taxes 472 billion yen, grew by 72% year-on-year.
Net income 340.7 billion yen, increased to 2.1 times the year-earlier level.
Earnings per share 111.03 yen.
Return on equity 10%.
Wealth Management recurring revenue Grew by 30% due to net inflow into recurring revenue assets and growth in client assets.
Investment Management business revenue Increased by 20% due to high level of assets under management.
Wholesale revenues Grew in all business lines and regions, attributed to revenue diversification.
Group net revenue (Q4) 452.7 billion yen, fell by 10% quarter-on-quarter.
Income before income taxes (Q4) 97.7 billion yen, down 29% quarter-on-quarter.
Net income (Q4) 72 billion yen, down 29% quarter-on-quarter.
Earnings per share (Q4) 23.39 yen.
Wealth Management net revenue (Q4) 104.5 billion yen, fell by 10% quarter-on-quarter.
Wealth Management income before income taxes (Q4) 37 billion yen, down 20% quarter-on-quarter.
Investment Management net revenue (Q4) 43 billion yen, down 6% quarter-on-quarter.
Investment Management income before income taxes (Q4) 15.5 billion yen, down 18% quarter-on-quarter.
Wholesale net revenue (Q4) 259.2 billion yen, fell by 11% quarter-on-quarter.
Wholesale income before income taxes (Q4) 37.5 billion yen, down 40% quarter-on-quarter.
Group-wide expenses 355 billion yen, down 2%.
Compensation and benefits 172.3 billion yen, declined by 10%.
Tier 1 capital ratio 16.2%, down about 2 percentage points from December.
Common Equity Tier 1 ratio 14.5%, down about 2 percentage points from December.
Total sales 5.4 trillion yen, rose 3% quarter-on-quarter.
Sales of stocks 3.9 trillion yen, rose 6% quarter-on-quarter.
Sales of bonds Increased 16% quarter-on-quarter.
Assets under management 89.3 trillion yen, exceeding KPI target of 89 trillion.
Net inflows 314 billion yen, marking eighth straight quarter of net inflows.
Alternative assets under management 2.6 trillion yen, a record high.
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Operating Highlights
New Acquisition: Agreement to acquire the Macquarie Group’s US and European public asset management business, enhancing Investment Management's size and global reach.
Market Positioning: Wealth Management saw a slowdown in net revenue as clients retreated, but during market declines, there was more buying than selling, indicating a strategic positioning to capitalize on market corrections.
Cost Control: Achieved cost savings of 4% in Wealth Management, contributing to a higher recurring revenue cost coverage ratio of 76%.
Share Buyback Program: Resolved to set up a share buyback program with an upper limit of 100 million shares and a repurchase price of 60 billion yen.
New Banking Division: Established a new banking division to leverage banking and trust banking functions for diverse, high-quality client services.
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Risk or Challenges
Economic and Market Conditions: The company faces risks related to economic and market conditions, which can lead to fluctuations in performance and investor sentiment.
Political Events: Political events may introduce uncertainties that could impact the company's operations and market performance.
Liquidity of Secondary Market: The liquidity of the secondary market is a concern, as it can affect trading volumes and overall market stability.
Interest Rate Volatility: The level and volatility of interest rates pose risks to the company's financial performance and client investment strategies.
Currency Exchange Rates: Fluctuations in currency exchange rates can impact the company's revenues and costs, particularly in international operations.
Competitive Conditions: Intense competitive pressures in the financial services industry may affect the company's market share and profitability.
Transaction Timing: The size, number, and timing of transactions can be unpredictable, leading to potential revenue volatility.
Regulatory Issues: The implementation of new capital requirements under Basel III may pose challenges in maintaining capital ratios and compliance.
Supply Chain Challenges: While not explicitly mentioned, supply chain challenges could arise from broader economic factors affecting operational efficiency.
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Guidance & Outlook
Wealth Management Initiatives: Recurring revenue grew by 30% due to net inflows into recurring revenue assets and comprehensive asset management services.
Investment Management Growth: Achieved a 20% increase in business revenue, marking the eighth consecutive quarter of net inflows.
Acquisition of Macquarie Group's Asset Management Business: This acquisition aims to enhance the size and global reach of the Investment Management division.
New Banking Division Establishment: A new banking division was established to leverage banking and trust banking functions for diverse client services.
Share Buyback Program: A share buyback program was announced with an upper limit of 100 million shares and a total repurchase price of 60 billion yen.
Dividend Payout: An ordinary dividend of 24 yen per share plus a commemorative dividend of 10 yen, totaling 34 yen per share.
Future ROE Target: Aim to maintain ROE of 8% to 10% or more by 2030.
Income Before Income Taxes Target: Target to generate more than 500 billion yen in income before income taxes.
Common Equity Tier 1 Ratio: Target to maintain a Common Equity Tier 1 ratio of 11% or higher over the medium term.
Current Market Outlook: Wealth Management has seen a slowdown in net revenue, but there are signs of buying activity during market corrections.
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Shareholder Return Plan
Ordinary Dividend: 24 yen per share
Commemorative Dividend: 10 yen per share
Total Year-End Dividend: 34 yen per share
Annual Dividend: 57 yen per share
Payout Ratio: 49%
Share Buyback Program: Upper limit of 100 million shares with an aggregate repurchase price of 60 billion yen.
Program Duration: May 15 to December 30, 2025.
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Key Q&A
Q:How was your business in fixed income compared to US peers, especially in January, February, March, and what's the latest situation in April?
A:Fixed income appears to be weak, which is our view as well. The product mix is different from competitors, and macro conditions are weak. In January, we saw 40% performance, slightly less in February, and slightly over 20% in March. April's performance is at the average level of Q4.
Q:Is my guess correct that your target capital ratio is around 12.8% after accounting for share buybacks?
A:We looked at various indicators for our share buyback decision, but we will announce the target range at the Investor Day.
Q:Are you beginning to see changes in resource allocation due to capital moving from the US to Europe?
A:Currently, we do not see significant changes in resource allocation, but if the trend continues, we may have to consider it.
Q:What is the rationale for the 60 billion yen buyback, and how much of that is RSU?
A:The rationale is based on various ratios, and the RSU portion is included in the 60 billion yen.
Q:Is the recent increase in IT expenditure a one-time phenomenon or will it continue?
A:The increase in IT expenses includes fiscal year-end factors and is not expected to continue at this level.
Q:What is your outlook on M&A fees and investment trust sales?
A:M&A fees may decrease as the market is currently calm, and investment trust sales were weak due to a lack of new launches.
Q:What is your view on the cost/income ratio of wholesale?
A:The cost/income ratio is currently high due to increased costs in equities execution, but we believe there is room for improvement.
Q:Was the low value at risk in March due to intentional control or market conditions?
A:We controlled our business activities stringently due to recent market conditions.
Q:Are you planning to be more aggressive in using risk assets?
A:We are always debating options regarding risk assets, and we will use them if opportunities arise.
Q:What is the current level of flow revenue in wealth management?
A:April's flow revenue is not as severe as in March but is similar to Q4, with some slowdown.
Q:Will the proceeds from the Takanawa Training Center sale be included in shareholder returns?
A:The proceeds from Takanawa will be recognized in Q1 and were not included in the shareholder return decision.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific target capital ratio and the exact breakdown of the RSU portion in the buyback. Additionally, there was vagueness in the response about future resource allocation changes and the impact of market conditions on risk assets.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
BofA Securities
Chief Financial
Conference today
ET day
Ending Conference
Financial Officer
Full Results
Group percent
Holdings Full
JPMorgan Securities
Koki Sato
Masaya Otsuka
Mr Chief
Natsumu Tsujino
Officer Masao
Officer page
Otsuka SBI
Results Ending
Sato JPMorgan
Securities Koki
Securities Masaya
Securities Natsumu
Securities Transcript
Transcript ET
Tsujino BofA
achievement expectation
bottom Group
condition
day today
page result
presentation telephone
result bottom
NMR Transcript
Nomura Holdings, Inc. (NMR) Q3 2026 Earnings Call Transcript
Unknown1-30
The earnings call summary presents mixed signals. Financial performance shows growth in Tier 1 Capital and Risk-Weighted Assets, but there's a decline in the Common Equity Tier 1 Ratio. The Q&A reveals concerns about volatility and uncertainties in net inflows, while management's unclear responses add to uncertainty. The buyback plan and strong Global Markets performance are positives, but the lack of clarity on future strategies and the impact of regulatory changes temper enthusiasm. Overall, the sentiment remains neutral due to these mixed factors.
Nomura Holdings, Inc. (NYSE:NMR) Q4 2025 Earnings Call Transcript
Unknown4-29
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.
Nomura Holdings, Inc. (NMR) Q4 2025 Earnings Conference Call Transcript
Unknown4-26
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.
Nomura Holdings, Inc. (NMR) Q2 2025 Earnings Call Transcript
Positive11-1
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.
NMR Report
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