Japanese brokerage Daiwa’s Q2 profit jumps 80% on Aozora stake

JAPAN’S second-largest brokerage and investment bank Daiwa Securities posted an 80.5 per cent surge in second-quarter net profit as investment income increased from its large stake in Aozora Bank, it said on Tuesday (Oct 29).

Net profit for the period from July to September was 53.8 billion yen (S$465.1 million), higher than the 29.8 billion yen in the year-ago period.

Ordinary income in Daiwa’s asset management division hit a record high as fund inflows grew, particularly into the updated tax-efficient investment accounts for domestic investors introduced in January this year.

However, in the wealth management division both revenue and ordinary income fell from the previous year, with market turmoil in August triggering the biggest single-day rout in Japanese stocks since 1987 and bringing down flow revenue.

Daiwa and Aozora announced a business and capital alliance in May this year. LSEG data showed that, as of August 2024, Daiwa is now Aozora’s largest shareholder with 23.65 per cent of its shares.

As Aozora is an equity-method affiliate, Daiwa recorded a boost in non-operating income of 21.6 billion yen in the quarter. REUTERS