Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2013/14 Earnings Presentation
35 slides from Nomura's earnings presentation, January 2014
Slide 1: Third quarter results overview
I will now give you an overview of our financial results for the third quarter of the year ending March 2014 using the document titled “Consolidated Results of Operations”. Please turn to page three.
Slide 2: Outline
LAL Outline Presentation NOMURA Financial Supplement Executive summary (p. 3) Overview of results (p. 4) Business segment results (p. 5) Retail (p. 6-7) Asset Management (p. 8-9) Wholesale (p. 10-12) Non-interest expenses (p. 13) Robust financial position (p. 14) Funding and liquidity (p. 15) Consol
Slide 3: Executive summary
For the nine months to December 2013, we reported a four-fold increase in pretax income to 273 billion yen. Net income for the period jumped 6.1 times year on year to 152.3 billion yen. Accumulated earnings per share for the nine months was 39.83 yen. Although net revenue inched up by only 1 percent
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) Braces aoa Yor + eA Yor + Net revenue 379.4 +6% -2% 1,167.1 +1% Non-interest expenses 292.5 | +3% -22% 894.1 18% Income before income taxes 86.9 | +19% 6.7x 273.0 4.0x Net income 48.3 | +27% +140% 152.3 6.1x EPS? 12.65 yen +27% +137% 39.83 yen 6.0x RO
Slide 5: Business segment results and significant items
I will discuss each segment in detail in a moment, but first I would like to briefly explain a number of significant items. Please refer to the bottom of page five. First, Ashikaga. On December 19, Ashikaga Holdings relisted and we booked an unrealized gain of 11.3 billion yen in Wholesale at the ti
Slide 6: Retail
Now, let’s look at Retail. Please turn to page six. Net revenue increased 7 percent quarter on quarter to 128 billion yen. Pretax income climbed 19 percent to 47.7 billion yen. Sales of stocks and investment trusts rose as retail investors looked to take on more risk. Market factors also helped stee
Slide 7: Retail: recurring revenue and NISA accounts
Please turn to page seven. Recurring revenue was 13.5 billion yen, or 54 billion yen on an annualized basis as shown on the bottom left. This is ahead of budget. We recorded 1.16 million NISA account applications as of the end of December. 7
Slide 8: Asset Management
Please turn to page eight for Asset Management. Net revenue increased 14 percent to 21.2 billion yen. Strong pretax income of 8.9 billion yen, up 45 percent quarter on quarter, included contributions from dividend income, and performance fees. Net assets under management reach a record 32.9 trillion
Slide 9: Asset Management: Taiwan acquisition
As shown on the bottom right of page nine, we recently announced the acquisition of ING Group’s asset management subsidiary in Taiwan to further expand our footprint in Asia. 9
Slide 10: Wholesale
Please turn to page 10 for an overview of Wholesale results. Net revenue grew 3 percent over last quarter to 188.7 billion yen. Pretax income increased 10 percent to 27.8 billion yen. As shown in the graph on the bottom left, Japan and the Americas improved, giving a well balanced revenue mix across
Slide 11: Wholesale: Global Markets
Please turn to page 11. Global Markets net revenue was roughly flat quarter on quarter at 158 billion yen. Fixed Income reported a 6 percent rise in net revenue to 99.2 billion yen. As shown by the heat map on the top right, Securitized Products in the Americas recovered and Rates and Credit in EMEA
Slide 12: Wholesale: Investment Banking
Please turn to page 12. Investment Banking net revenue increased 29 percent to 30.7 billion yen on the 11.3 billion yen unrealized gain from the listing of Ashikaga Holdings. Gross revenue in Investment Banking of 35.9 billion yen was softer compared to the previous quarter as a result of a decline
Slide 13: Non-interest expenses
Please turn to page 13 for an analysis of expenses. Firm-wide expenses increased 3 percent quarter on quarter to 292.5 billion yen. The main factors behind the increase include higher compensation and benefits due to increased bonus provisions and a rise in business development expenses as a result
Slide 14: Robust financial position
Please turn to page 14 for an update of our balance sheet. Total assets increased by 1.8 trillion yen from the end of September to 43.6 trillion yen, partly due to the depreciation of the yen. Our Basel 3 Tier 1 and Tier 1 common ratios were 12.0 percent. The 10.4 percent figure you see at the top r
Slide 15: Funding and liquidity
Funding and liquidity NOMURA Balance sheet structure Balance sheet (As of Dec 2013) Highly liquid, healthy balance sheet Assets Unsecured funding? structure a 83% of assets are highly liquid = More than 80% of unsecured funding is trading and related assets that are long-term debt ; marked-to-market
Slide 16: Financial Supplement
Financial Supplement
Slide 17: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits Liabilities Short-term borrowings Total payables and deposits 405 Total loans and receivables Total collateralized agreements 26 Total collateralized financing Trading liabilities 2,366 Other liabilities Long-term borrowings Total trading assets’
Slide 18: Value at risk
= Definition = From April 1, 2013 to December 31, 2013 (billions of yen) — 99% confidence level — Maximum: 9.9 — 1-day time horizon for outstanding portfolio — Minimum: 4.4 — Inter-product price fluctuations considered — Average: 68 tions over) ED 1.4 1.3 24 1.3 26 1.9 3.6 Equity Interest rate 65 5.
Slide 19: Consolidated financial highlights
Full year Quarter (billions of yen) (billions of yen) 120 8% 11.3% 407.2 100 12% 100 : 6% 80 10% === Net income 80 4.9% 8% 60 ROE (%) 60 4% ox 40 40 4% 2% 11.6 20 0.6% 20 2% ie) 0% 0 0% esr aa a Net revenue 1,535.9 1,813.6 389.1 6536 4313 3564 379.4 Income before income taxes 85.0 237.7 13.0 169.7 1
Slide 20: Consolidated income
(billions of yen) Full year Quarter Revenue Commissions 347.1 359.1 83.7 125.7 157.6 105.6 121.4 Fees from investment banking 59.6 62.4 13.0 21.8 25.4 23.0 15.8 Asset management and portfolio service fees 144.3 141.0 35.0 38.8 42.4 40.7 42.1 Net gain on trading 2726 368.0 88.2 106.5 128.4 110.2 108.
Slide 21: Main revenue items
(billions of yen) Full year Quarter Stock brokerage commissions (retail) 36.0 51.8 10.7 26.6 42.5 25.4 36.3 Stock brokerage commissions (other) 132.7 112.9 27.2 32.0 37.7 31.6 34.9 Other brokerage commissions 9.4 11.7 3.0 3.8 5.3 42 44 Commissions for distribution of 1366 © 180.1 36.2 54.4 63.9 37.0
Slide 22: Income before income taxes by segment and region
Adjustment of consolidated results and segment results: Income (loss) before income taxes Retail 63.1 100.6 20.3 57.2 81.1 40.0 47.7 Asset Management 20.5 21.2 7.3 3.9 67 6.2 8.9 Wholesale! 37.7 717 44.4 35.7 25.2 25.3 27.8 Three Business segments total 46.0 193.5 71.9 96.8 113.0 71.4 84.4 Other! 35
Slide 23: Segment Other
Income (loss) before income taxes Net gain (loss) related to economic Full year Quarter (billions of yen) (billions of yen) 60 50.1 60 40 35.2 ‘0 20 66 20 ° = = — me «(CO -20 7.0 35 37 20 -40 40 -60 60 80 67.9 80 hedging transactions 8.4 1.0 0.4 08 7.4 7 5.2 Realized gain(loss) on investments in equ
Slide 24: Retail results
Full year Quarter , C Paorans | —__Fvaa (billions of yen) Fvzori Fvzorans —— ee Commissions 201.5 225.9 55.7 110.3 66.5 17.8% 40.6% Sales credit 59.0 80.9 20.3 28.6 29.7 24.3 25.7 6.0% 26.5% Fees from investment banking and other 38.2 36.8 66 10.4 9.8 13.4 8.0 -40.0% 21.3% Investment trust administr
Slide 25: Stock brokerage commissions and investment trust distribution
Stock brokerage commissions and commissions for distribution of investment trusts Full year Quarter (billions of yen) (billions of yen) 180 70 150 60 Stock brokerage commissions 420 50 & = Commissions for 90 distribution of investment 30 trusts 60 20 30 10 0 0 Hig an og Or rantie Faas 3a 41 2 3 Stoc
Slide 26: Retail client assets
Retail client assets (trillions of yen) = Other 100 90.9 96.0 83.8 83.8 877 = Overseas mutual funds 9 72.0 73.6 ™ Bond investment trusts 60 ™ Stock investment trusts = Domestic bonds 40 ™ Foreign currency bonds 99 w Equities 0 - Equities 37.2 46.7 38.0 46.7 50.5 53.4 56.5 Foreign currency bonds 6.2
Slide 27: Retail client assets: net asset inflow
Retail client assets: Net asset inflow’ Full year Quarter (billions of yen) (billions of yen) 4,000 1,225 1,300 1,100 2,400 900 2,000 700 500 360 1,035 188 $00 38 || 100 — — t) -38 100 (1) Excluding regional financial institutions. 27
Slide 28: Number of accounts
Number of accounts (Thousands) _ Fya0ii2 — Fy20t243 20121320 Mar Mar Dec Mar Jun Sep Deo Accounts with balance 4,985 5,025 5,006 5,025 5,069 5,090 5,104 Equity holding accounts 2,706 2.717 2,710 2.717 2,727 2,722 2,674 Nomura Home Trade / Net & Call accounts 3,773 3,747 3,846 3,747 3,822 3,881 3,939
Slide 29: Asset Management results
(bilions of yen) raorira Fvzotas a ee ee — 8Q AQ QQ 8 Net revenue 65.8 68.9 18.8 18.3 20.2 18.6 21.2 13.9% 12.9% Non-interest expenses. 45.3 47.8 11.5 14.4 13.5 12.5 12.3 1.3% 7.2% Income before income taxes 20.5 21.2 7.3 3.9 67 6.2 8.9 44.6% 22.0% Total assets under management (trillions of yen) 40
Slide 30: Assets under management by business
Assets under management (gross) by business* Asset inflows/outflows by business* Full year Quarter (trillions of yen) (billions of ean “ [3a[ 40 || 40 || 20 || 20 | Investment trust Investment trusts business 295 1,099 364530544. 410962 business ETFs 347424 48 6613815389 Investment advisor i vesine
Slide 31: Wholesale results
Wholesale temons ofyen) | rvzowns | Fvaotsna Fraonarrzrans Sa eee a || | Net revenue 555.0 644.9 189.0 196.9 194.6 183.3 188.7 2.9% 0.2% Non-interest expenses 592.7 573.2 144.6 161.3 169.4 158.1 160.9 1.8% 11.2% Income (Loss) before income taxes. 37.7 71.7 44.4 35.7 25.2 25.3 27.8 9.9% -37.3% Breakd
Slide 32: Private equity related investments
Private equity related investments (billions of yen) 300 = Terra Firma 221.3 mAsia 200 Europe (excluding Terra Firma) 104.6 103.1 104.6 107.0 102.1 100 J - A n ~ 0 - a Japan 65.5 52.7 53.2 52.7 52.5 51.7 10.5 Europe (excluding Terra Firma) 26.8 21.8 21.1 218 22.9 22.9 23.9 Asia 1.9 2.0 1.8 2.0 1.9 1
Slide 33: Number of employees
Japan (excluding FA) 19,598 14,123 19,877 14,123 14,654 14,454 14,308 Japan (FA) 2,011 1,907 1,951 1,907 1,911 1,923 1,918 Europe 4,014 3,618 3,747 3,618 3,485 3,459 3,456 Americas 2,420 2,271 2,316 2,271 2,240 2,243 2,248 Asia-Pacific! 6,352 6,037 6,207 6,037 5,961 5,945 5,902 Total 34,395 27,956 3
Slide 34: Disclaimer
WV 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
Slide 35: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com