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Nomura Q1 profit tumbles 91% on losses at wholesale, overseas units

Tokyo

JAPANESE investment bank Nomura Holdings posted its worst quarterly performance in over two years with a 91 per cent slump in net profit, as the wholesale division and overseas unit lost money on slow fixed income and equities trading.

Nomura, Japan's No.1 brokerage and investment bank, said in a statement on Thursday that its April-June net profit was 5.2 billion yen (S$63.8 million) versus 56.9 billion yen a year earlier. Tokai Tokyo Research Center Co's Tatsuo Majima had forecast a 52.5 billion yen profit, according to Thomson Reuters.

Nomura's wholesale division, which sells services to corporations and institutional investors, lost 7.4 billion yen before tax - its first quarterly loss since January-March 2016 - as a slowdown in the brokerage's rates, foreign exchange and emerging markets business pushed down bond trading revenues.

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The unit's performance was in stark contrast to recent results by Wall Street banks. There, volatility caused by escalating trade tensions and central bank policy changes has put trading desks at banks such as Goldman Sachs Group Inc and Morgan Stanley on track for their best year since 2011.

The wholesale unit's loss dragged Nomura's overseas business into a 7.7 billion yen pre-tax loss, compared to a 15.5 billion yen net profit in the same period last year. All three areas - the Americas, Europe and Asia and Oceania - lost money.

Stable profitability at the international operations has remained elusive for the brokerage 10 years after it bought Lehman Brothers' equities and investment banking business in Europe and Asia in 2008.

Pre-tax profit at Nomura's retail unit, which serves mostly individual investors, also fell by 7 per cent to 19.9 billion yen from a year earlier, with the brokerage blaming US-China trade concerns for a decline in stocks trading and weak sales of investment trusts. REUTERS