Nomura reports 39% YOY drop in net profit in December 2021 quarter

Nomura Holdings Inc. reported a 39% year-over-year decline in its net profit in its fiscal third quarter as income across several business units declined.

Net profit in the October to December 2021 quarter was ￥60.3 billion, compared with ￥98.4 billion a year prior, the Japanese investment and brokerage firm said in a Feb. 1 press statement.

Nomura did not give a forecast for its annual earnings. The company had previously set a goal of ￥320 billion in pretax profit for the next fiscal year that starts April 1. Pretax profit from the company's three main segments plunged 51% year-over-year in the three quarters of the current fiscal year to ￥171.8 billion amid a slow global trading environment.

"Nomura's profit is quite dependent on the market environment," said Michael Makdad, an analyst at Morningstar. The company can achieve its pretax profit goal if the environment is "very good" like it was in late 2020, Makdad said, adding, "but usually, the environment is not as good."

Pretax profit from the retail segment for the October to December 2021 period slid 36% to ￥18 billion, weighed down by weak sales of stocks in and outside Japan. The wholesale business reported a 47% plunge in profit to ￥40.8 billion in the three months as weaker fixed-income operations in Japan and Europe offset stronger investment banking operations.

Nomura CFO Takumi Kitamura said during an online conference after the results were announced that it was hard to say if the pretax profit for next year was achievable. Kitamura expects "high volatility" in the markets in 2022, partially driven by tighter U.S. monetary policy. He did not provide more details.

The company's M&A business was a good shape, generating revenue of more than ￥10 billion for the fifth consecutive quarter amid global waves of M&A. Nomura Greentech, a recently acquired M&A adviser in clean tech, helped boost the company's presence in the U.S. market.

The pretax profit from the company's investment management business slipped 6% to ￥20.4 billion in the third quarter, though AUM hit a record high of ￥68.5 trillion, up from ￥61.2 trillion a year earlier. Nomura wants to grow the assets managed by the unit to ￥80 trillion by March 2025.

As of Jan. 31, US$1 was equivalent to ￥115.21.