Daiwa quarterly profit rises on brokerage commissions, trading

[TOKYO] Daiwa Securities Group Inc's fourth-quarter profit rose 16 per cent, beating analysts' estimates as brokerage commissions and trading income jumped.

Net income climbed to 38.5 billion yen (S$429 million) in the three months ended March 31 from 33.2 billion yen a year earlier, Tokyo-based Daiwa said in a statement on Tuesday. That exceeded the average estimate of 35.4 billion yen based on a Bloomberg survey of eight analysts.

Chief Executive Officer Takashi Hibino is betting that Japanese stocks will keep rising as more people shift their savings to investments, boosting brokerage commissions. With Japan's population declining, the nation's second-largest securities firm is also seeking new revenue sources overseas by investing in peers in Asia.

"Daiwa's retail business remains in good form," Masao Muraki, a Tokyo-based analyst at Deutsche Bank AG, said before the results. "But the shift in demographics may cause the business to shrink in four or five years' time, so Daiwa sees inorganic growth abroad as one option to avoid that."

BLOOMBERG