Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2021/22 Earnings Presentation
34 slides from Nomura's earnings presentation, January 2022
Slide 1: Consolidated Results of Operations: Q3 FY2021/22 overview
Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. I will now give you an overview of our financial results for the third quarter of the fiscal year ending March 2022 using the document titled Consolidated Results of Operations. Please turn to page two.
Slide 2: Presentation and Financial Supplement contents
Presentation Financial Supplement © Executive summary (p. 2-3) © Overview of results (p. 4) © Business segment results (p. 5) © Retail (p. 6-7) © Investment Management (p. 8-9) © Wholesale (p. 10-12) © Non-interest expenses (p. 13) © Robust financial position (p. 14) © Funding and liquidity (p. 15)
Slide 3: Nine-month results overview
First, let’s look at the nine month period to the end of December. Net revenue declined 17 percent year on year to 1,023.1 billion yen and income before income taxes declined 55 percent to 177.1 billion yen. The chart on the bottom right shows a breakdown by business segment. Three segment total inc
Slide 4: Third quarter results overview
As shown on top right, firmwide income before income taxes was 80.1 billion yen and net income was 60.3 billion yen, a marked improvement from the second quarter. All business segments reported stronger revenues and pretax income. Three segment total income before income taxes was 79.2 billion yen,
Slide 5: Highlights
Highlights ew “| 1 Y1,023.1bn. | 17% Y270.9bn f 10% 0% Y846.0bn | 1% Y80.1bn i 43x -39% Y177.1bn [ 55% Y60.3bn | 18.8x -39% Y112.0bn | -64% Y19.07 | 18.9x -39% Y35.33 64% 8.7% 5.4% 3 Diluted netincome oss atvibuabe to Nomura Hadrgssharehides per sare,
Slide 6: Net revenue and income before income taxes
Net revenue and income (loss) before income taxes’ 30 Gna wy 40-30 ‘Net revenue Retail Y87.4bn 3% 11% Y257.5bn ‘Unrealized gain (loss) on investments in equity -Y0.8bn -Y0.8bn - - Y4.5bn, 35% Y351.0bn_ 10% 13% Y1,023.1bn 17% Y18.0bn 6% 36% Y54.0bn_ 18% Y20.4bn 35% 6% ‘Y80.3bn 44% ‘Y37.4bn ‘YO.9bn Y4
Slide 7: Retail results
First, Retail. Net revenue increased 3 percent quarter on quarter to 87.4 billion yen and income before income taxes grew 6 percent to 18 billion yen. As I mentioned earlier, the pace of net inflows into discretionary investments and investment trusts has picked up since April last year and recurrin
Slide 8: Retail KPIs
The top right shows net inflows into investment trusts of 114.4 billion yen and net inflows into discretionary investments of 129.4 billion yen, both higher compared to last quarter. This growth has contributed to recurring revenue assets of 20.3 trillion yen and recurring revenue of 28.1 billion ye
Slide 9: Investment Management results
Net revenue increased 17 percent to 40.1 billion yen and income before income taxes grew 35 percent to 20.4 billion yen. Business revenue increased 8 percent to 31.5 billion yen. Continued inflows into the investment trust and investment advisory businesses lifted assets under management to a record
Slide 10: Investment Management flows and assets under management
As shown by the flow of funds on the left, the investment trust business reported inflows of 250 billion yen. The breakdown of this is shown on bottom left. The dark red portion shows core investment trusts, which booked inflows from the bank channel and into funds for defined contribution pension p
Slide 11: Wholesale results
Net revenue increased 17 percent quarter on quarter to 202.7 billion yen. The revenue environment improved in the latter half of the quarter for Global Markets with Fixed Income and Equities both posting sequential revenue gains. Investment Banking saw continued strong performance in the global M&A
Slide 12: Global Markets
Global Markets net revenue was 163.8 billion yen, up 19 percent quarter on quarter. Fixed Income net revenue grew 24 percent to 88 billion yen. As the heat map on the right shows, Fixed Income in the Americas is pointing diagonally down due to challenged results in Rates, but in other regions the ar
Slide 13: Investment Banking
Net revenue was 38.9 billion yen, up 10 percent quarter on quarter. M&A revenues easily exceeded 10 billion yen for the fifth straight quarter. Notably, in the Americas we have won sustainability- related mandates via Nomura Greentech and supported multiple transactions across a broad range of secto
Slide 14: Non-interest expenses
Firmwide expenses declined 10 percent over last quarter to 270.9 billion yen. The decline is mainly due to a decline in Other expenses shown at the bottom. Last quarter we booked a provision of 39 billion yen related to transactions from before the global financial crisis and the impact of this was
Slide 15: Robust financial position
As you can see on the bottom left, our Tier 1 ratio was 20.5 percent and our common equity Tier 1 ratio was 18 percent, as of the end of December, both up compared to the end of September. Tier 1 capital, the numerator in the calculation, increased by 65 billion yen due to earnings, while risk-weigh
Slide 16: Funding and liquidity: balance sheet structure
Balance sheet structure Highly liquid, healthy balance sheet ‘structure —76% of assets are highly liquid trading and related assets that are marked-to-market and matched to trading and related liabilities through repos etc. (regionally and by currency) —Other assets are funded by equity Balance shee
Slide 17: Financial Supplement
Financial Supplement 16
Slide 18: Consolidated balance sheet
Consolidated balance sheet (billions of yen) Assets Total cash and cash deposit: Total loans and receivables Total collateralized agreemer Total trading assets and Private equity investments" Total other assets’ Total assets 1. Including securities pledged as collateral ‘Short-term borrowings Total
Slide 19: Value at risk
Definition = From April 1, 2021, to December 31, 2021 (billions of yen) — 99% confidence level — Maximum: 89.7 — 1-day time horizon for outstanding portfolio — Minimum: 4.8 — Inter-product price fluctuations considered — Average: 9.1 (billions of yen) ™ ‘Framer Fromme; Fvomanay va Equity Interest ra
Slide 20: Consolidated financial highlights
Full year Quarter (billions of yen) (billions of yen) 300 10% 200 tsi 20% ‘== Net income (loss) attributable to Nomura 82 Holdings, Inc. (‘NHI") 459 5% 100 7.1% 10% shareholders 57% LS 60.3 5, 0 0% ‘ROE (%) 150 100 1554 -300 200 Peas Pra I — Net revenue 1,287.8 1,401.9 402.1 170.0 353.3 3189 351.0 I
Slide 21: Consolidated income
Full year Quarter ‘omens ramen Frame ge Revenue ‘Commissions 308.8 376.9 96.7 102.4 829 916 82.6 Fees from investment banking 103.2 108.7 36.1 MT 357 33.9 46.0 Asset management and portfolio service fees: 238.2 230.0 58.6 o3 640 672 69.9 Net gain on trading 356.6 310.0 136.4 6.9 520 911 106.8 Gain (
Slide 22: Main revenue items
Full year Quarter taste es a Se oe DS DE BE Ma ‘Stock brokerage commissions 196.5 262.3 65.5 72.8 58.2 677 57.3 Other brokerage commissions 144 143 34 36 37 40 48 ‘Comms sions for distribution of investment trusts 66.7 68.8 18.1 174 14.4 11.2 11.6 Other 31.2 6 96 86 66 88 8.9 Total 308.8 376.9 96.7
Slide 23: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes! Full year Quarter (lors of yen) ramam promos HM a Retail 49.4 92.3 28.3 26.1 19.0 17.0 18.0 Investment Management 33.6 91.0 215 3.2 449 15.0 20.4 Wholesale 92.2 64.3 76.9 165.9 -28.4 25.0 40.8 ‘Three business
Slide 24: Segment Other
Income (loss) before income taxes’ Full year Quarter (billions of yen) 150 100 94.4 50 39.6 17 0 -_ 2 Be -50 288 404 66.2 prin eames Sg Net gain (loss) related to economic hedging transactions 17.5 11.5 14 -13.5 34 38 AA Realized gain (loss) on investments in equity caciakion hala ks ing pmcaes 66 1
Slide 25: Retail results data
1 Full year Quarter (billions of yen) ‘Commissions 153.2 187.7 49.3 51.0 38.6 35.6 36.5 25% — -25.9% Of which, stock 612 926 24.8 25.9 17.8 17.6 17.6 0.2% 28.9% Of which, commissions for distribution of investment trusts 66.9 68.4 18.9 16.0 14.4 1.4 1.6 42% 38.7% Sales credit 56.8 58.4 158 14.4 16 1
Slide 26: Retail client assets
Retail client assets (trillions of yen) = Other 140 1266 qa10 «1288 , 120 ® Foreign investment 104.0 trusts 100 © Bond investment. trusts 80 = Stock investment. trusts 60 = Domestic Bonds 40 "Foren currency 20 = Equties 0 (Rawat | anv | Equities 627 82.3 712 82.3 Foreign currency bonds 58 54 55 54 D
Slide 27: Net inflows of cash and securities
Net inflows of cash and securities! Full year Quarter (billions of yen) (billions of yen) 1,200 1,200 888 800 800 471 400 400 315 an 2 = “495 -146 ~400 -400 -429 613 -800 -800 26 26
Slide 28: Number of accounts
Number of accounts ((mousands) —Fy2019/20, Fy2q20210 © Fy202o29 Fv ORNIR Accounts with balance 5,319 5,329 5,333 5,329 5,348 5,342 5,362 Equity holding accounts 2,920 2,927 2,939 2,927 2,924 2,923 2,949 NISA accounts opened (accumulated)' 1,737 1,791 1,761 1,791 1,820 1,828 1,839 Online service acco
Slide 29: Investment Management results and AUM
Full year* Quarter’ 7 — Fy20202 FV2029/220 aa ‘Fraptazo Framay2t ieee ee eee revenue 1215 111.9 288 299 28.0 23 3.5 7.6% 9.5% in gain/loss 136 51.2 106 24.2 35.5 54 8.6 70.2% — -18.8% Net revenue 1079 163.1 394 540 63.5 43 40.1 16.8% 1.8% Non-interest expenses 744 721 178 18.8 18.6 19.3 19.8 24% 10.
Slide 30: Asset inflows/outflows by business
Asset inflows/outflows by business’ Full year Quarter (oilions of yen) ecieiellacaeual Dsante aa sa Investment trusts business 1,788 2,753 588 393 346 267 250 of which ETFs 2,133 2,241 203 268 344 -28 15 Investment advsory and international businesses 302 883 678 -765 128 772 109 Total net asset inf
Slide 31: Wholesale results and revenue breakdown
Full year Quarter (billions of yen) ee ee a a il en A eS Net revenue 648.6. 223.1 132.8 1727 202.7 17.4% 9.2% Non-interest expenses 556.4 627.1 146.3 165.2 161.1 147.7 161.9 9.6% 10.7% Income (loss) before income taxes 92.2 64.3 76.9 -165.9 -28.4 25.0 40.8 63.5% ~46.9% Breakdown of Wholesale revenue
Slide 32: Number of employees
dun Sep Dec Japan 15,748 15,330 15,701 15,330 15,556 15,393 15,299 Europe 2,691 2,769 2,751 2,769 2,779 2.811 2,817 Americas 2,120 2,152 2,158 2,152 216 2am 2,181 Asia and Oceania! 6,070 6,151 6,146 6,151 6,196 6,216 6,259 Total 26,629 26,402 26,756 28,402 26,647 26,591 26,556 1. Includes Powai offi
Slide 33: 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 34: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com