Nomura Holdings Inc ADR American Depositary Shares

The conference is now in presentation mode.

Your line is muted. Good day everyone and welcome to today's Nomura Holdings first quarter operating results for fiscal year ended March 2026 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 results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these projections. Such factors include economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of transactions. With that, we'd like to begin the conference. Mr. Hiroyuki Moriuchi, Chief Financial Officer, please go ahead.

Moriuchi CFO speaking. Thank you very much for joining us. Let me brief you on the results of operations for the first quarter. First of all, please turn to page 2 of the document. This is the page on the executive summary. Group net revenue came in at 5 to 3.3 billion yen, up 16% over last quarter. Income before income taxes grew 64% to 160%. was 104.6 billion yen, an increase of 45% compared with last quarter. The introduction of reciprocal tariffs for the United States and increase in geopolitical risk led to an uncertain market environment, but all four divisions, including the newly established banking division, achieved In addition, the sale of fixed assets by Nomura Properties announced last quarter contributed to income-before-income taxes of around 56 billion yen in the first quarter. As a result, EPS was 34.04 yen and annualized ROE was 12%. Next, let's look at the performance of each business, starting with wealth management on page 5. Wealth management first quarter net revenue increased 6% to 105.8 billion yen and income before income taxes rose 8% to 38.8 billion yen. Despite the stock market's sharp decline in April, The provision of consulting services tailored to clients' needs resulted in an increase in primary bond sales and secondary stock transactions that captured market fluctuation and flow revenue, etc. grew 16%. Partly owing to the newly established Japan Stock Investment Fund, recurring revenue assets saw a net inflow for the third quarter. The recurring very new cost coverage ratio over the last four quarters reached a high level of 69% owing to our efforts to keep costs down. Please turn to page 6 for an update on total sales by product. Total sales increased 24% to 6.7 trillion yen. Sales of stock rose sharply compared with the previous quarter, partly owing to a tender offer worth more than 1 trillion yen. Sales of bonds increased 42% owing to large primary transactions including unsecured soft bank group corporate bonds. We will now look at KPIs on page 7. As shown on the top left, recurring revenue assets saw a net inflow for the 13th consecutive quarter at 278.9 billion yen. Meanwhile, as shown on the top right, recurring revenue declined versus the previous quarter. This was because of a decline in recurring revenue assets during the quarter as a result of the decline in stock prices in April 2017. and because of the absence of investment advisory fees in the first quarter, which are collected on a half-yearly basis. However, owing to the net inflows of recurring revenue assets and market recovery, recurring revenue assets recovered to 24.6 trillion yen at the end of June. Next, please turn to page 8 for investment management. Net revenue was up 18% to 50.6 billion yen, while income before income taxes rose 39% to 21.5 billion yen. As you can see on the bottom left, investment gain and loss improved sharply quarter-and-quarter to 9.9 billion yen. This reflected an improvement in investment related to American Century Investments and driven by private equity investment from Nomura Capital Partners. Business revenue fell 6% owing to a decline in Nomura, Babcock and Brown net revenues and the low performance fee compared to the previous quarter, but asset management fees, which make up the lion's share of business revenue, remain solid. Please turn to page 9 for an update on the asset management business, which is the key source of business revenue. As you can see on the top left of the page, assets under management at the end of June hit a record high level of 94.3 trillion yen owing to market recovery. Net inflows came to around 108 billion yen as shown on the bottom left with net outflows from the investment trust business totaling around 207 billion yen and net inflows to the investment advisory and international businesses of around ¥315 billion. In the investment trust business, investment trusts excluding ETFs and MRFs saw net inflows of around 280 billion yen driven by newly established japanese equity investment funds while etfs saw outflows of approximately 670 billion yen these etfs outflows are presumed to be due to selling by certain investors individuals waiting to reinvest and profit taking despite net outflows related to global equities the investment advisory and international businesses saw net inflows owing to inflows into yen bonds and international high-yield bonds. As you can see in the bottom right, we continue to build out our private asset businesses steadily while the yen strengthened during the quarter. Alternative assets under management reached a record high driven by continued growth in net inflows. Please turn to page 10 for wholesale. Wholesale net revenue rose 1% to 261.1 billion yen and income before income taxes increased 12% to 41.9 billion yen. Global markets revenues increased 8% and investment banking revenues fell 27% dropping back after strong Q4 performance, but still reached the highest level for Q1 since fiscal year 2016 and 2017, the first fiscal year for which a comparison is possible. Please turn to page 11 for an update on business line performance.