Nomura Holdings, Inc. · TSE:8604
Nomura — Q1 FY2017/18 Earnings Presentation
33 slides from Nomura's earnings presentation, July 2017
Slide 1: First quarter results overview
I will now give you an overview of our results for the first quarter ended June 2017. Please turn to page two.
Slide 2: Outline
Outline Presentation NOMURA Financial Supplement Executive summary (p. 2) Overview of results (p. 3) Business segment results (p. 4) Retail (p. 5-6) Asset Management (p. 7-8) Wholesale (p. 9-11) Non-interest expenses (p. 12) Robust financial position (p. 13) Funding and liquidity (p. 14) Consolidate
Slide 3: Executive summary of first quarter results
The first quarter got off to a slow start due to heightened geopolitical risks such as elections in Europe and the situation surrounding North Korea. Into the latter part of the quarter, stocks rallied and client activity picked up as the French elections turned out as expected and economic indicato
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) i ' FY2017/18 FY2016/17 FY2016/17 H 10 4Q xe) 1a YoY Net revenue 1 360.8 349.1 +3% 338.5 47% _ Non-interest expenses 1 283.4 266.8 +6% 275.7 +3% { Income before income taxes ! 77.4 82.3 6% 62.8 +23% i 1 Net income’ H 56.9 61.3 -7% 46.8 +21% i ee eee E
Slide 5: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes Ccilions of yen) ELSE 718 ESL 6/17 _ PRS Voy Netrevenue Retail 101.7 103.2 83.8 Asset Management 28.1 23.3 25.9 Net revenue 360.8 349.1 43% 47% Income Retail 24.9 25.8 -3% 8.7 +187% (loss) before. income Asset Management 13.6 87 +56% 12.2 +11% taxes
Slide 6: Retail results
Net revenue was 101.7 billion yen and income before income taxes was 24.9 billion yen, both roughly unchanged from the previous quarter. The market rally led to an improvement in retail investor sentiment and we reported an uptick in sales of secondary stocks and investment trusts. Although total sa
Slide 7: Retail investment trusts and discretionary investments
The graph on the bottom left of page 6 shows quarterly sales of investment trusts and investment trust assets under management. Both of these increased quarter on quarter driven by inflows into India stock and thematic products as well as low risk products aimed at distributing income. The graph on
Slide 8: Asset Management results
Net revenue increased 21 percent to 28.1 billion yen and income before income taxes climbed 56 percent to 13.6 billion yen. As shown on the bottom left, assets under management reached a record high for the third straight quarter at 46.1 trillion yen, pushing up asset management fees. We also booked
Slide 9: Asset Management inflows and market share
The graph on the top left shows first quarter inflows of 230 billion yen. Of this, the investment trust business reported inflows of 316 billion yen mainly into ETFs and MRFs. This combined with an increase in the market value of investment trusts to drive Nomura Asset Management’s share of the publ
Slide 10: Wholesale results
Net revenue increased 5 percent quarter on quarter to 179.3 billion yen. Investment Banking revenues declined partially due to seasonal factors related to the first quarter. Global Markets revenues increased on the back of robust risk management and monetization of an uptick in client activity in th
Slide 11: Global Markets results
Net revenue increased 7 percent quarter on quarter to 154.2 billion yen. Fixed Income revenues grew 11 percent to 95.7 billion yen as our Emerging Markets and G10 FX businesses improved. As shown on the right, EMEA slowed from the particularly strong previous quarter, while Japan was up on stronger
Slide 12: Investment Banking results
As shown on the top left, net revenue declined 9 percent to 25.1 billion yen. Gross revenue, which represents revenues from clients before allocation to other divisions, was 45.4 billion yen. Revenues declined compared to last quarter, which was partially attributable to seasonal factors such as a d
Slide 13: Non-interest expenses
Non-interest expenses were up 6 percent at 283.4 billion yen. This is mainly due to compensation and benefits, specifically higher bonus provisions. We take into account full year performance when determining bonuses and our quarterly provisions are not perfectly aligned with revenues each quarter.
Slide 14: Robust financial position
As you can see on page 13, we maintain a robust financial position. Our Tier 1 ratio at the end of June was 19.1 percent and our CET1 ratio was 18.1 percent. Applying the fully-loaded 2019 Basel III standard to our balance sheet at the end of June gives a CET1 ratio of 17.8 percent. That concludes t
Slide 15: Closing remarks and outlook
Before I finish, let me add that in Retail we reorganized our structure to do away with the previous regional-based approach. By giving branch managers more discretion, we are better placed to deliver the best value added solutions to each client tailored to the specific requirements of each region.
Slide 16: Financial Supplement
Financial Supplement 15
Slide 17: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits 2,972 Total loans and receivables 3,097 Total collateralized agreements 18,730 Total trading assets! and private equity investments 15,192 Total other assets 2,860 Total assets 42,852 405 351 Liabilities Short-term borrowings Total payables and d
Slide 18: Value at risk
= Definition = From April 1, 2017, to June 30, 2017 (billions of yen) — 99% confidence level — Maximum: 4.1 — 1-day time horizon for outstanding portfolio = Minimum: — 3.0 — Inter-product price fluctuations considered — Average: 3.5 0.9 0.7 0.7 0.9 1.4 07 0.9 Equity Interest rate 3.8 27 44 3.2 2.9 2
Slide 19: Consolidated financial highlights
1. Full year Quarter (billions of yen) (billions of yen) 87% 100 81% 8.6% 8.7% 9 300 + %% ; 8.1% : 7.0% ° ‘sm Net income 80 attributable to Nomura Holdings, 209 6% Inc. ("NHI") 4.9% 60 shareholders . 40 Cy =e ROE! 1OE(%) 100 5% 20 0 0% 0 Net revenue 1,395.7 1,403.2 338.5 347.0 368.6 349.1 360.8 Inco
Slide 20: Consolidated income
Full year Quarter (billions of yen) “Frans Fr2oion7 “FY2017/18° Revenue Commissions 432.0 327.1 76.3 74.6 86.3 90.0 91.0 Fees from investment banking 118.3 92.6 17.3 23.4 23.7 28.2 22.7 Asset management and portfolio service fees 229.0 216.5 52.6 52.1 55.1 56.6 58.3 Net gain on trading 354.0 475.6 1
Slide 21: Main revenue items
(billions of yen) Full year Quarter Stock brokerage commissions 275.0 210.0 48.4 47.0 57.5 57.1 57.0 Other brokerage commissions 23.3 15.1 43 3.4 4.3 3.0 3.4 Commissions for distribution of investment trusts 89.5 75.1 15.8 17.6 19.1 22.6 23.2 Other 44.2 26.9 77 66 54 7.3 7.3 Total 432.0 327.1 76.3 7
Slide 22: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter Powonen) Frm Pe ag Retail 127.6 74.8 8.7 14.4 25.9 25.8 24.9 Asset Management 36.7 42.3 12.2 74 14.0 87 13.6 Wholesale 15.4 161.4 46.6 39.3 47.4 28.1 25.4 Three business segments total 179.7 2
Slide 23: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 40.0 37.6 30.0 226 20.0 13.1 13.6 100 64 5.8 EO 0 = = -10.0 3.8 Net gain (loss) related to economic 6.4 73 42.0 44 15.9 08 07 hedging transactions Realized gain on investments in equity securities held for operating purposes
Slide 24: Retail related data
1 (billions of yen) Full year Quarter Commissions 220.3 171.8 38.4 38.9 474 47.5 41.3 0.4% 23.1% Of which, brokerage commission 78.9 628 13.4 124 19.8 176 18.0 2.3% 37.2% Of which, commissions for distribution of investment trusts 93.6 82.3 17.6 20.0 a4 23.6 23.7 0.2% 34.5% Sales credit 86.4 85.3 18
Slide 25: Retail client assets
Retail client assets (trillions of yen) 120 407.7 01 108.0 1077 111.9 = Other 100.6 . 400 95.3 = Foreign investment trusts 80 ™Bond investment trusts 60 = Stock investment trusts = Domestic bonds 40 = Foreign currency bonds 20 wEquities 0 Equities 60.2 66.3 55.8 59.6 66.7 66.3 69.9 Foreign currency
Slide 26: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter (billions of yen) (billions of yen) 1,000 — 1,000 500 500 319 48 , || “8 18 -306 -243 338 -500 -500 1. Cash and securities inflows minus outflows, excluding regional financial institutions. 25 25
Slide 27: Number of accounts
Number of accounts (hrowsand) Frais FvzotenT = vzotent? vam: Mar Mar in Accounts with balance 5,389 5,363, 5,390 5,384 5,383 5,363 5,342 Equity holding accounts 2,827 2,836 2,842 2,856 2,839 2,836 2,821 Nomura Home Trade! / Net & Call accounts 4,350 4,456 4,378 4,403 4,427 4,456 4,361 New Individual
Slide 28: Asset Management results and AUM
Full year Quarter Net revenue 95.4 99.4 25.9 21.3 28.9 23.3 28.1 20.5% 8.3% Non-interest expenses 58.7 57.1 13.7 13.8 14.9 14.6 14.5 0.7% 6.1% Income before income taxes 36.7 42.3 12.2 7.4 14.0 87 13.6 56.5% 10.9% Assets under management by company (trillions of yen) wie EE 43.5 474 40.3 415 Nomura
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business* Full year Quarter (omensoryen) Gad ead EG GE EE Ee Investment trusts business 2,717 1,590 423 6 1,038 969 316 of which ETFs 2,339 1,934 -24 477 279 1,203 183 Investment advisory business 2,038 584 -169 ods 95 315 86 Net asset inflow 4,755 2,174 $92 349 1,132 1,284
Slide 30: Wholesale related data
Full year Quarter (billions of yen) [poner rare ee ee 100 2 QQ 1 Net revenue 720.3 190.9 179.9 197.3 171.2 179.3 4.8% Non-interest expenses 704.9 577.8 144.3 140.6 149.9 143.1 154.0 7.6% 6.7% Income before income taxes 15.4 161.4 46.6 39.3 47.4 28.1 25.4 9.9% 45.6% Breakdown of Wholesale revenues Fu
Slide 31: Number of employees
Japan 16,083 16,227 16,792 16,543 16,450 16,227 16,903 Europe 3,424 3,026 3,170 3,147 3,063 3,026 3,013 Americas: 2,503 2,314 2,481 2,297 2,279 2,314 2,325 Asia and Oceania‘ 6,855 6,619 6,769 6,667 6,606 6,619 6,673 Total 28,865 28,186 29,212 28,654 28,398 28,186 28,914 1. Includes Powal office in I
Slide 32: Disclaimer
NOMURA Disclaimer This document is produced by Nomura Holdings, Inc. (“Nomura”). Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by Nomura or any affiliate thereof. Offers to
Slide 33: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com