Nomura Q4 profit slides 63% as retail investor risk appetite falls

[TOKYO] Nomura Holdings Inc, Japan's biggest brokerage and investment bank, posted a 63 per cent fall in fourth-quarter net profit on Thursday as risk appetite among retail clients fell amid volatile markets.

Nomura said in a statement its net profit for the three months ended March was 22.7 billion yen (S$275.5 million), versus 61.3 billion yen a year earlier. The slowdown in growth was the steepest in almost four years.

Nomura's annual net profit fell 8 per cent to 219.3 billion yen, from 239.6 billion yen a year ago. That was lower than an average forecast of 256.58 billion yen of five analysts surveyed by Thomson Reuters.

Pre-tax profit at Nomura's key retail division, which serves mostly individual Japanese investors, slid 17 per cent in the fourth quarter as sales of stocks and investment trusts slowed amid falling markets and a rising yen.

Nomura's overseas division recorded a pre-tax loss of 18.7 billion yen for the fourth quarter, dragged down by a 26 billion yen pre-tax loss in the Americas on reserve provisions for unspecified legal costs, a higher effective tax rate and fall in net income from a year earlier.

That performance pushed the overseas unit into an annual pre-tax loss of 0.7 billion yen, underscoring how closely the unit's fortunes are tied to factors beyond Nomura's control.

Pre-tax profit at Nomura's wholesale division, which includes markets trading and investment banking, rose 57 per cent to 44.2 billion yen between January-March from a year earlier, helped by bouts of volatility that saw clients transact more in capital markets.

Nomura also said it would buy back its own shares worth up to 70 billion yen, or 2.7 per cent of its outstanding shares.

REUTERS