Nomura Holdings Inc ADR American Depositary Shares

everyone and welcome to today's Nomura Holdings second quarter operating results for fiscal year ending March 2025 conference call. Please be reminded that today's conference call is being recorded at the request of the hosting company. Should you have any objections, you may disconnect at this point in time. During the presentation, all the telephone lines are placed for listen-only mode. The question and answer session will be held after the presentation. Please note that this telephone conference contains certain forward-looking statements and other projected results which involve known and unknown risks. delays, uncertainties, and other factors not under the company's control which may cause actual result, performance, or achievement of the company to be materially different from the result, performance, or other expectations implied by those projections. Such factors include economic and market conditions, political events and invested sentiment, liquidity of secondary market, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of transactions. With that, we would like to begin the conference. Mr. Takumi Kitamura, Chief Financial Officer, please go ahead.

Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. Let me give an overview of our financial results of the second quarter of the fiscal year ending March 2025 using the document. Please turn to page 2. Group-wide net revenue increased 6% quarter-on-quarter to 483.3 billion. Income before income taxes grew 29% to 133 billion yen. Net income was 98.4 billion, representing a 43% increase over the last quarters. We had a very strong quarter. Income before income taxes and net income were both at their highest level since the quarter ended June 2020. All three international regions were portable, and some international entities made use of tax loss carried forward, lowering our effective tax rate to 27%. EPS was 32.26 yen, and annualized ROE was 11.6%, which is at the upper limit of our 2030 quantitative target of ROE of 8 to 10% or more. Three-segment income before income taxes shown on the bottom right was 122.5 billion, marking the sixth straight quarter of gains. We were able to deliver operating leverage as all divisions booked higher revenues and we maintained our control of costs. In wholesale, our cost-to-income ratio improved to 83% and income-before-income taxes doubled. Before going into each business in detail, let's first take a brief look at the results of the first half on the fiscal year. Please turn to page 3. The bottom left shows net revenue of 937.8 billion, 31% higher than the first half of the previous year. Income before income taxes grew 129% to 235.9 billion, while net income increased by 186% to 167.3 billion. EPS was 54.58 yen and ROE was 10.1%. The bottom right gives a breakdown of income before income taxes. All divisions reported strong gains with few-segment income-before-income taxes totaling 209.1 billion. This represents more than 70% of March 2025 KGI target of 288 billion yen announced at our Investor Day in May last year. In wealth management, asset management-type business gained further grounds to record a 30% increase in recurring revenue, while investment management's asset management business continues to gain traction with business revenue at a record high since the division was established. Both divisions continue to build up stable revenues where we generate revenues based on the level of client assets. In wholesale, All business lines, fixed income, equities and investment banking and all regions reported stronger revenues compared to the same period last year, underscoring progress in diversifying our revenue sources. As revenues grew 30%, we controlled costs to deliver income before income taxes 6.4 times higher than the previous year. Based on this performance, today we announced a 23 yen dividend per share for shareholders of record as of the end of September, giving a dividend payout ratio of 40.6%. Now let's take a look at the second quarter performance by segment. Please turn to page 6. The percentages I refer to here are all quarter-on-quarter comparisons. Wealth management net revenue increased 2% to $116.7 billion and income before income taxes grew 7% to $45.3 billion. Income before income taxes was the highest in nine years since the quarter ended June 2015. During this quarter, we witnessed a sharp market adjustment in early August, followed by volatile market conditions. However, our sales partners advised and followed up closely with our clients based on their portfolios and market data, allowing clients to remain relatively calm. As we had already been advising clients with a view to medium to long-term investing and diversification, our clients' unrealized gains have increased. and we were able to achieve strong net inflows of recurring revenue assets amid this adjustment phase. As a result, recurring revenue increased 10% to a record high of $50.3 billion. While bonus provisions were up in line with top-line performance, we continued to control non-personnel expenses, giving a recurring revenue cost coverage ratio of 70%, beating our March 2031 target long ahead of schedule please join to pay 7 for update on total sales by product total sales declined 900 billion yen to 5.9 trillion yen but this is because last quarter included a tender offer of over 1 trillion yen excluding that sales of stock increased from last quarter We executed multiple primary transactions and took orders from clients taking advantage of the market volatility from August to buy on the dip, resulting in sales of over 4 trillion yen. Sales of investment trusts and discretionary investments slowed from the strong prior quarter but remained robust compared to the fourth quarter of the last fiscal year. Sales of insurance products increased on demand for retirement funds and estate planning, while sales of products and Thank you very much. 826.2 billion, outstripping our annual target of 800 billion yen. As of the end of September, recurring revenue assets were 23.4 trillion, a decline from last quarter due to market factors, but quarterly average remained roughly unchanged. Recurring revenue was at a record high due to changes to our product mix and the fact that some half-yearly fees are received in the second quarter. The number of workplace services provided shown on the bottom right was 3.79 million, which is also ahead of our KPI target of 3.66 million.

Please turn to page 9 for investment management. Net revenue was up 18% at 56.1 billion yen, while net income-before-income taxes grew 38% to 31.9 billion yen. As you can see in the bottom left, Sable business revenue was 39.4 billion yen, marking a record high for quarterly revenue since the division was established. The asset management business remained strong, while assets under management at the end of September dipped, From last quarter, the quarterly average was roughly unchanged. We reported ongoing inflows into products where investment management expertise is required, such as active fund management and private assets, giving us a better product mix and higher investment management fees. Investment gain loss was up 95% at 16.7 billion yen, driven by a significant increase in American century investment-related valuation gain loss. Please turn to page 10 for an update of the asset management business which generates business revenue. As you see on the top left, asset management at the end of September stood at 88.8 trillion yen down from last quarter due to market factors, but the quarterly average was roughly the same. The bottom left shows another quarter of net inflows of 1.1 trillion yen, 650 billion yen of which was into investment trust business and 470 billion yen into the investment advisory and international business. In the investment trust business, MRFs reported over 440 billion yen of outflows, hinting at a prominent shift of funds to new investments. Excluding ETFs and MRFs, investment trusts booked inflows of 570 billion yen into private assets. balance funds and global equities across diverse distribution channels including Nomura Securities, regional financial institutions and other securities brokers. ETFs booked inflows of 520 billion yen mostly into Japan equities. In the investment advisory and international businesses, the international business made a strong contribution driven by inflows into U.S. high-yield bond fund next please turn to page 11 for an overview of wholesale performance net revenue increased eight percent to 263.4 billion yen as shown on the bottom left global markets revenues grew six percent while investment banking revenues were up 14 percent At the same time, wholesale expenses declined 3%. Although bonus provisions increased in line with top-line performance, severance-related expenses included in last quarter were no longer present, and this combined with yen appreciation to lower costs. As a result, income-before-income taxes significantly increased by 114% to 45.3 billion yen, and our cost-to-income ratio improved to 83%. Please turn to page 12 for an update on each business line. Global markets net revenue increased 6% to 221.1 billion yen. This quarter saw a spike in volatility on the back of uncertainty over the U.S. economy, a sell-off in tech stocks and geopolitical risks. Amid this environment, we were able to provide liquidity to the market and monetize robust client floats. Fixed income net revenue increased 2% to 127.8 billion yen. Macro products had a good quarter while wet rates booking stronger revenues from an uptick in client activity in Japan and America than FXEM. Performance improving in AEJ in spread products created slow in Japan from a strong prior quarter and Securitized products revenues declined primarily in America. Equity's net revenue was 93.2 billion yen, up 14% over the first quarter. Financing and derivatives had strong quarter in Japan and Asia, while equity products revenues grew substantially. Please turn to page 13 for investment banking. net revenue increased 14% to 42.3 billion yen. In Japan, we supported several corporate actions aimed at boosting corporate value, resulting in record high revenue since the fiscal year ended March 2017. When comparisons are possible, by-product advisory revenues grew internationally, driven by EMEA's involvement in High-profile transactions such as the acquisition of BritVic by Carlsberg's UK subsidiary, although Japan slowed from the strong performance last quarter, we supported multiple tender offers and management buyouts. Revenues in financing and solutions were up markedly. ECM revenues doubled on the back of offerings to sell cross-share holdings, while DCM executed many large insurances, including SoftBank Corp. Bond Type Class Shares, Sekisui Houses, Subordinated Bonds, and Infroneer Holdings Green Bond Type Class Shares are first in Japan. Please turn to page 14 for non-interest expenses. Group-wide expenses were roughly flat at 350.3 billion yen. Compensation and benefits were unchanged at 184.7 billion yen. Although bonus compensations increased in line with performance, as mentioned, Severance-related expenses declined from last quarter. Commissions and floor brokerage increased due to high trading volumes, but other expenses declined 6% on lower professional fees. Please send to page 15 for an update on our financial position. Table on the bottom left shows. Tier 1 capital of 3.4 trillion yen, a decrease of approximately 150 billion yen from the end of June. In addition, risk-weighted assets declined by 900 billion yen to 19.2 trillion yen, resulting in a tier 1 capital ratio of 17.6% and the common equity tier 1 ratio of 15.7%, both roughly the same as last quarter. That concludes our overview of our second quarter results. To sum up, despite the market volatility this quarter, we achieved annualized ROE of 11.6%, the second quarter of results, to consistently achieve 2030 quantitative target of ROE of 8 to 10% or more. ROE of 11.6% is the highest since the quarter ended December 2020. At that time, wholesale accounted for 60% of three-segment income before income taxes, but now earnings are well balanced across three divisions, giving us a higher quality ROE. Recurring revenue in wealth management and business revenue in investment management, both of which are sources of stable revenues, have increased by nearly 80% since the 2020 December end quarter, lifting our repeat business baseline ROE. We have also diversified our revenue mix in wholesale by growing our equity products and securitized products businesses into second and third pillars to complement our macro products business. In October, both wealth management and wholesale slowed down from the strong second quarter as clients increasingly sat in the sidelines given various political events. That said, wealth management revenues are still trending at a high level, contributing to baseline ROE while wholesale revenue diversification continues. As demonstrated in the second quarter, we will continue to control costs and take on appropriate risk in line with market conditions as we aim to boost our bottom line. Thank you very much for your continuous support.

We have a question and answer session now. If you have a question, Press Sharp 7. If we want to cancel a question, press Sharp 7.

The first question is by SMBC Nikko Securities. Muraki-san, please go ahead. SMBC Nikko Securities, this is Muraki speaking. I have two questions. First of all, page 11. This time, as you had explained, in Japan, large ECMVU was gained and performance was strong in Asia, and that applies not just to wholesale but to wealth management as well. Are these performances sustainable? ECM. When I read the press releases, volatility impacted in and after August, so therein after It hasn't been so strong despite the strength in July. But regarding Asia, stimulus package in China made a contribution. And in comparison to recent quarters, profits in Asia seem to be stronger. What is your forecast for the months and years ahead? That's my first question. Second question is on capital policy. Regarding share buyback, what kind of debate had taken place to reach the conclusion not to buy back shares? And as you write in your report, set one ratio, target maximum. Regarding the study of setting the maximum, where are you in terms of your discussions? Thank you. Thank you very much. On your first question of ECMs in Japan and whether such performance is sustainable. There are many in the pipeline, including large deals and Euro-yen CB with rate increase. These are some of the areas we are injecting efforts into. In this area, competition is becoming intense, but in the selection of lead managers, We're doing our pitch so that we're not impacted by competition, and in terms of pipeline, there are several potential deals, and we wish to realize those potential deals in the pipeline. Another issue is selling of policy holdings, and we think that the level of sales will remain high. Nomura will continue to support the capital policies of our So that's my response regarding sustainability of ECM deals. Now on to Asia. If we look at the past track record, FX3 emerging and credit, they have been the core of our business. More recently, in addition, we have begun to see strength in equity, equity-deliverative business. And another area is IWM, International Wealth Management. So with the addition of these businesses, we're seeing a higher diversification of revenue sources. In the quarter that has just ended, FX emerging made a comeback, which was an area we had been struggling. And the equity team is becoming stronger. Muraki-san, as you have rightly pointed out, Chinese equity, Hong Kong equity boosted, but was there that tailwind? I wouldn't deny, but I think more had to do with diversification of revenue sources and widening of coverage in terms of products, and those factors delivered results. And on your second question, buyback. BAL 3 will kick in in March next year. FRTP impact will have to be evaluated, and the impact has become more visible. On the other hand, there are other things on our mind. So we're not denying share buyback as an option, but as we think about many elements, this time around we decided not to. But on the other hand, 50% or higher total payout ratio, this has been the external commitment that we had made. So as we We proceed into the second half. We will continue to consider such option. And set one ratio, maximum, ceiling, Basel III impact is being objectively assessed. Frankly speaking, Basel II.5 versus Basel III, the behavior is different. In the case of Basel III, we would like to monitor more closely, not to say that we will be on the sidelines for a year or two, but for the time being, we would like to observe the situation to think about what range would be appropriate for our firm. So, next fiscal year, at At early timing in next fiscal year, we are hopeful that we will be able to set the ceiling. In terms of the buffer, not the buffer, but Tier 1 or Set 1 range, we will be studying that. And to what extent do we do or not do buyback? Those are some of the items that we will continue to consider. Thank you. Thank you very much. I'm not sure whether I'm supposed to ask, but you said you're thinking about many other things as well. Is that something to do with the regulatory authorities or are you thinking about investments? Wholesale performance is significantly improving So in the short run, we may allocate capital to such area. And we've been talking about inorganic opportunities, and we are continuing to pursue such opportunity. Thank you very much. Your responses were very clear.

The next question comes from Watanabe-san from Daiwa Securities. Hello, I am Watanabe from Daiwa. I have two questions. First, regarding fixed income business of GM, the major U.S. players two percent decline on a year-on-year basis, but in your case, plus 32 percent in your case compared to U.S. peers. What was the factors of outperformance of FIC revenue for you? And the second question is related to wealth management in the July-September quarter. What was the monthly revenue trend? Could you comment on that? And also, And what was the impact of the plunge of market in August, and how did you address that situation in August? Thank you. Thank you very much. First, regarding fixed income, on a year-on-year basis, we grew greatly, but that's from the start of a low level last year. So last year's level cannot really be something that we can compare this year against. But as mentioned, Revenue diversification has progressed, and that is a major point. Securitized products and others have increased in its level, and in the second quarter, in the area of FX and emerging, volatility went up, but we could monetize in those businesses Also in macro, our rates products, which struggled last year, has gradually seen recovery of clients' activities, and especially in America, client flow increased, and that's something that we could monetize. As a result, on a year-on-year basis, we could achieve a significant improvement And we outperformed our peers, and we could gain market share. Regarding your second question, monthly revenue in July was the highest, and August and September due to market factors, monthly revenues were lower. And in July, we had multiple equity primary deals, so that contributed to our strong performance. And in August, as you know, in the early part of August, there was a plunge in the market. And And when the stock prices were low, some investors bought, but there was a slowness in the market. So we spent sufficient time explaining the situation to clients. So the situation in August is something that we could accept. And then in September, the market was not very clear in terms of the direction. And at the Tokyo Stock Exchange and other exchanges, transaction volumes shrunk in markets. So July was the strongest, followed by weaker months. Thank you. Thank you very much for your answer. Regarding the October onward for wealth management, what is the level of October compared to the July, August and September? So we have just come out from October. I said there is slowness, but it's not really slow. Overall, transaction volume has come down. So we are affected by that. But as operating environment, environment is not so weak, so the decline is not so big. Thank you very much for your answer.

Now we move to next question. As we couldn't confirm your affiliation, please state your company name and your name after hearing unmuted announcement. Now unmuted.

VOA Tsuchino speaking. I have two questions. First, you've been talking about equity and fixed income and high performance in Q2. But since the beginning of October, assuming there has been change, where have those changes occurred? Second question. ACI. volatility has this time around delivered positive results, but you're hedging, and yet you are able to lock in such significant gains. How is this being achieved? Is it discount rate of interest rates? And to what extent did that contribute? But it's really difficult to understand why this large gain. Then in Q3, will it turn to the other way around? Will there be a reversal? So interest rate and the AUM increasing. So the positive factor of rate will come back in Q3. So is this $17 billion, $18 billion? Can you give us a breakdown of factors and how they contributed? Thank you, Tsujino-san. Let me try to respond. The slight slowness in October was caused mainly by macro factors, equity and securitized products. Equity and securitized products are doing well. But since the beginning of October, Forex emerging and rates, there has been slight sluggishness in these areas. Rate trend is uncertain and dollar rate has become rather uncertain. So these are factors that we can't avoid. And on this point next week, There will be the presidential election in the United States. And it is considered that it will take four or five days for the accounts to be announced. And that's taken into consideration by the investors, and they're on the sidelines, taking wait-and-see attitude. But dry powder is piling up. So in the second half, we think that there will be a comeback of activities in the market. And on ACI, I am not able to comment on the details, but the factor for markup, one, AUM has increased, partly driven by market factors, but their business is strong and AUM is increasing with investments increasing. Their business is strong that has led to increased AUM. That part is difficult to hedge. So, of course, that remains a gap. And rate decline is one of the major contributors to the big markup. It's not that why we do 100% hedge on fully hedged basis. In the end, this was positive. When rates go up, of course, it would go to the reverse direction, but as I said, it's partly hedged, so it depends on the degree. To what extent will that deliver results? Thank you. This time, in these numbers, is it half-half? What's the breakdown? What's the contribution of AUM increase? Is that the majority, or do you think that the rate impact was bigger than AUM, or is it difficult to answer? Stock prices are going up, so AUM has increased, partly driven by stock price increase, and their business expansion also was a contributor. So... each factor had made impacts. I cannot make a clear comment regarding the breakdown, but both factors were both significant contributors. Thank you very much.

Now we move to next question. As we couldn't confirm your affiliation, please state your company name and your name after hearing unmuted announcement. Now unmuted.

I'm Ari from JP Morgan Securities. Can you hear me? Yes. Thank you. I have two questions. First question regarding wholesale cost income ratio improvement. So 83% was achieved this time. Regarding top line, the revenue diversification has advanced, as you mentioned. So regarding cost reduction, So severance-related costs came down, but operational efficiency improvement and what is the progress of the core cost reduction? My second question is also related to cost of wealth management. So non-personnel cost was reduced according to the explanation in the slide. But what is the content and what more room for saving is there for wealth management costs? So those are my two questions. Thank you very much for your questions. Firstly, regarding cost income ratio of wholesale, is it sufficient? No, we are not satisfied yet, but 83% was achieved this time. So as the direction, it is the positive direction. All alone, we had SRC-driven cost-saving initiatives. And SRC initiatives, out of SRC initiatives, 50 billion yen cost-saving measures have been implemented already. So now the effects of saving are now materializing. But at the large picture, operating model change or IT architecture change, transformation such areas are where we have specific measures that are waiting to be implemented so we would like to do more from here so overseas there's inflationary environment so various upward cost pressure is mounting, but by suppressing such costs, we would like to tightly control costs. Regarding wealth management cost control, compared to wholesale, wealth management cost saving has been going ahead of wholesale as we looked at all systems and various types of costs we have eliminated what is not necessary so 20 billion yen of course saving was identified and we have implemented measures to achieve that and we are seeing the effect of that. But the review of wealth management cost was based mostly on the removal of unnecessary cost, but we are now in the next stage where we are revisiting the entire picture. For example, operational front to back process review is conducted. For example, how much cost is being incurred in which department. from wealth partners, wealth sales partners to operating centers. We are looking at every detail in our efforts to change operational structure and such initiative has started. So we're expecting the result to come out from such initiative down the road. Thank you very much for your answer. Thank you very much. I clearly understood.

Now we move to the next question. As we couldn't confirm your affiliation, please state your company name and your name after hearing a muted announcement. Now, unmuted.

SBI Securities, my name is Otsuka. I hope you can hear me. Yes, we can hear you. Thank you very much. There's an overlap with the question asked before myself, but wholesale cost ratio. In your explanation, Kitamura-san, you said that there could be the issue of forex and revenue, but Can we understand that this is sustainable? There was a sudden improvement between Q1 and Q2, so what would be the standard level? Thank you very much. Eighty-three percent cost ratio, expense ratio. In comparison to last year, it's much more comfortable. We are controlling cost and, this time around, revenue increased, which was a major factor. As I explained in the previous question and answer dialogue, cost control will be continued. Separate from the level of revenue, we will steadfastly continue to implement cost control initiatives. If we can maintain this level of revenue, naturally the cost ratio is achievable and there is further room for reduction. Thank you very much. Second question, page 26. For 623, inflows of cash and securities are quite strong. 1649 for Q2. Can you explain the background factors for the strong inflows of cash and securities? I asked a similar question in your results announcement for Q1, but I repeat the same question. Thank you. What's the backdrop of money coming in? The business strategy turnaround has made contributions to our performance. New customers, acquisition of new clients is proceeding well, and when we look inside, The impact from existing customers seems to be bigger. As a result of segmentation, per sales partner, the number of customers has become more focused. So our partners can offer more thorough and comprehensive service to each and every customer. And in the end, the satisfaction from our customers has improved significantly. and our sales partners have been able to foster stronger trust with their customers. And these customers are customers with large asset holdings to begin with, so with the improvement of satisfaction and trust, they may choose to offer Nomura more money and workplace business With IB and with well management, they have a common KPI as they engage in business activities. As you know, IB has a very robust franchise which will be leveraged to offer these solutions to our corporate clients. Human resources investment is an area where many of our customers have become keenly interested, so it's become easier to offer our proposals and solutions. Of course, there are differences company by company, and we are providing customized approach depending on the requirements of our corporate clients. And also, Alliance is expanding, so new introduction and sales is going on well. Thank you very much. I have a follow-up question. Next page, page 27. Accounts with balance, equity holding accounts in this quarter, 360,000 accounts with balance and 28,000, 280,000 equity holdings accounts, sudden increase. What was the reason behind? Lying securities were taken over by Nomura Securities. That's why. Thank you very much.

The next question is from Bansan from Bloomberg Intelligence. Please go ahead. Thank you very much. Regarding recurring revenue asset, I have three questions. First, revenue divided by asset. So when we calculate the ratio compared to the previous quarter, the ratio has come up. And even when I calculate the average, so maybe that's due to the change in the mix. but there was an explanation previously provided that the marginal return on asset does not go up, but was there the change in the mix that contributed to the improvement in the ratio? And secondly, seasonality-driven improvement, recurring revenue, what kind of recurring revenue is seasonally driven would such recurring revenue, seasonally driven, go up in the third or fourth quarter as well as the second quarter? And then thirdly, recurring revenue is steadily increasing, but what is going to be the pace or speed? Is there going to be a major driver that will accelerate the speed of expansion? For example, In the second half, there will be large IPOs, and when you have a deal flows, would it accelerate? And when workplace business become more active, would it accelerate the recurring revenue? So what kind of changes do you expect will serve as the driver that will accelerate the recurring revenue? Thank you. Thank you very much for your question. Firstly, in terms of product mix, significant change is not expected as I believe I explained, but it is not that there is no impact. For example, private asset type or alternative type assets, when they flow in, then margin or return will go up. the product mix had some effect. And regarding seasonal factors, so semi-annual fee that we received in September and in March, we received semi-annual fee. So in the fourth quarter and the second quarter, So there is a tendency of boost from the semi-annual fee because of the timing of receiving such fees. And from here, how do we further increase the revenue? We have advisory services which we would like to strengthen further. Rather than pursuing transactions, we would like to closely manage clients portfolio and provide advice so when customer satisfaction or trust on us grow then we expect them to shift more assets to Nomura in the past transaction with Nomura securities centered on flow or equities transactions. But I believe there is a gradual shift. But by increasing the level of our services, we could expect customers to shift their portfolio more to Nomura. That is going to be the biggest driver. Thank you very much. I understood.

The next question is by Citigroup. This is Niwa Obsidi. Are you receiving my voice? Yes, we can hear you. Thank you very much. I have a couple of questions. First, M&A. Another question, wealth management segment. So one question each. First, M&A targets to date. At large meetings, you talked about asset management area being the target of M&A. Is that the right understanding? And if possible, what's the missing piece for Nomura? The reason I ask this question, recently in alternatives, there have been some attractive deals and recently, large financial institutions, asset management, M&A appetite has risen quite significantly. And yet, I think there are too many players. Do you still want to go in? So that's my first question. Secondly, in wealth management, new acquisition, new customers, My question will overlap with Otsuka-san's question, but in the previous quarter, you talked about private wealth management, high net worth, and you're doing well in terms of acquisition of new customers through reference funds. And when we just take a look at the acquisition of new customers, the number seems to have gone down. Is this a one-time-off trend, or do you think that you've gained enough new customers so that there will be slowdown, or do you still have more room for increasing number of customers? Thank you very much. First of all, on the target of M&As, asset management, is that a target area? Yes. it continues to be our target area. What's our missing piece? NAM is the biggest asset management company in Japan. In terms of foreign equity management, we are proud to have a certain track record, but the focus is limited. That taken into consideration, I think it's right to say that the rest is a missing piece. And of course, we're interested in alternatives, but Variation-wise, we are watching at the expensive price. So where is the market? What's the opportunity? And how much room do we have in terms of our capital? We will continue to monitor the situation. On the acquisition of new customers, it's not that we're... trying to build up the number of customers. Our priority is rather than seeking maximization of the number of customers, we want quality customers. We want to attract quality customers. We want to offer services to quality customers. As I already mentioned, per partner, the number of customers one partner covers has been reduced. So that means that the time each partner spends per customer is longer, so more service is being provided to customers, and there's higher satisfaction, so much so that we want our customers to refer us to friends and families. And the partners have more time. So when I talk with partners, I think there is more of a mood to try to cultivate new customers. So in the first half, the opening of new accounts has risen quite significantly. You said that there's lack of visibility, and that's something that we need to think about, but... we will continue to expand the coverage of our customers. Thank you very much. Sorry, I haven't done enough homework, but on M&A Opportunity, you are the biggest company in the sector, but in terms of customers, I don't understand where the customers are in terms of new customers who still don't have a transaction with Nomura. Do you think that the customer number can grow double, triple of where it lies today? Thank you very much. It's also partly due to the segmentation of our customers, but to a certain extent, yes, we have customer coverage, but What about the potential? I think there still is huge potential. Maybe a customer has opened an account but not deposited much money and there are inactive customers. So this customer has an open account and we want to attract the customers to do more transactions with Nomura and new emerging customers who are about to become the next generation high net worth, we want to reach out more to such customers too. For example, one area we're focusing on is workplace. I think this could become a gigantic market. And Niwa-san, you've observed overseas markets, so you know well the characteristics of such segments. And there is enormous potential in such a market, so we will continue our approach to the workplace business and reach out to those customers. We've been able to reach out to customers, but there still remains areas where we haven't yet been able to reach out. Thank you very much. That was a clear answer. Thank you.

It's time to finish and we would like to conclude question and answer session. If you have some more questions, please ask our Nomura Holdings IR department. In the end, we would like to make closing address by Nomura Holdings.

Thank you very much. So Q2 result was pretty strong. as we analyze our performance from various perspectives and for example in wealth management pti margin over the last year we have seen a great progress looking back on the past year there has been a tail wind of market and we do understand that but more than that Our own measures took effect and resulted in numbers. For wholesale has been struggling for a while, but we are starting to see a bright sign in wholesale, even though we are not satisfied with where we are. 11.6% of ROE. You would wonder whether it is sustainable or not. So we would like to deliver such a level of number in a stable manner. So for that, we would like to diversify revenue and generate high quality revenue while at the same time controlling cost and risk. So we would like to do our best to deliver the good performance. And thank you for your continued support. Thank you.

Thank you for taking your time and that concludes today's conference call. You may now disconnect your lines.