NomuraHoldings Inc. is resorting to more share repurchases after previousbuybacks failed to stem a slide in its stock price amid declining earnings.
The biggest Japanese brokerage April 27 that it will spend as muchas ¥20 billion to buy back a maximum of 35 million shares, 0.9% of outstandingstock, from May 18 through July 22. The company unveiled the plan as itreported a 41.5% drop in net profit for the year ended March 31 and a net lossfor the final quarter of the 12-month period. For the 2015-2016 fiscal year,the group reported an ROE of 4.9%, down from 8.6% for the prior year.
Nomura has bought back shares multiple times in the past twoyears, with the last program completed in May 2015. In the past 12 monthsthrough April 26, however, the company has lost 32.69% of its market value,with net income declining three consecutive fiscal quarters through March 31.Nomura shares traded at 68.7% of book value at the close of trading April 26,compared to 106.6% a year earlier. Domestic rival was at94.3% of book value that day.
As its stock tumbles and profitability worsens, Nomura isopen to more share buybacks, CFO Takumi Kitamura said during a conference callfollowing the after-market earnings release.
"We have enough stamina left," he said.
The latest results underscore challenges Nomura faces asfinancial markets gyrate and liquidity dwindles. In the year through March 31,revenue from both commissions and trading gains fell at the company.
The brokerage said April 12 that it will close "certainbusinesses" in Europe, the Middle East and Africa and "rationalizecertain areas" in the Americas.
The announcement followed reports that Nomura will cut jobsin those markets and shut equity operations in Europe, where the company hasmade losses in most quarters since it took over Lehman Brothers businesses in2008.
Nomura has faced tough times in the U.S., too, but will notgive up on the country in the long term, COO Tetsu Ozaki said during the call.
"The U.S. is more than 100 times bigger than Japan whenit comes to the fee pool size, therefore we think there is enough room toexpand there in the future," he said.
As of April 26, US$1was equivalent to ¥111.19.