Nomura Holdings, Inc. · TSE:8604
Nomura — Q2 FY2021/22 Earnings Presentation
34 slides from Nomura's earnings presentation, October 2021
Slide 1: Overview of first half and second quarter results
Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. I will now give you an overview of our financial results for the first half and second quarter of the fiscal year ending March 2022 using the document titled Consolidated Results of Operations. Please turn to page 2 for an overview of th
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: Firmwide first half results overview
Firmwide net revenue declined 19 percent year on year to 672.1 billion yen. Income before income taxes was 97 billion yen, down 63 percent, while net income declined 75 percent to 51.7 billion yen. There are two main reasons why earnings declined from the previous year. First, in the first quarter w
Slide 4: Second quarter firmwide income before income taxes
Firmwide income before income taxes declined 76 percent quarter on quarter to 18.5 billion yen. This included a pretax loss of 40.4 billion yen in segment Other, which includes the 39 billion yen provision for legal expenses. Income before income taxes from our three core businesses was 57 billion y
Slide 5: Highlights
Highlights (billions of yen, except EPS and ROE) 18.5 i -76% 78% 97.0 | 63% 3.2 | 93% -95% 51.7 | -75% Y1.01 | 94% 95% Y16.25 -76% 0.5% 3.8% 3 Diluted netincome oss atvibuabe to Nomura Hadrgssharehides per sare,
Slide 6: Net revenue and income (loss) before income taxes
Net revenue and income (loss) before income taxes’ Net revenue 3189 10% 14% 672.1 19% Unrealized gain (loss) on investments in equity 52 19 45% 4% Income (loss) before income taxes: | 18.5 76% } -78% 97.0 *Additional information on “Other’ (2Q)™ LOSS related to economic hedging (Y3.8bn) | Gain on ch
Slide 7: Retail results
Net revenue was 85.2 billion yen. As market uncertainty persisted through July and into August, brokerage commissions from sales of secondary stocks, investment trusts and bonds declined. However, recurring revenue and contributions from primary stocks both increased, resulting in revenues remaining
Slide 8: Retail growth and key performance indicators
We are taking a number of steps to grow our Retail business over the medium to long term. On the top right, you can see investment trust net inflows of 78.1 billion yen and discretionary investment net inflows of 90.2 billion yen, representing continued monthly net inflows since April. This ongoing
Slide 9: Investment Management results
Net revenue declined 46 percent quarter on quarter to 34.3 billion yen. Income before income taxes was 15 billion yen, down 67 percent from last quarter when we booked a contribution of 24 billion yen from the listing of a Nomura Capital Partners investee company. This quarter’s results slowed as th
Slide 10: Assets under management and inflows
Assets under management were lifted by market factors and inflows as shown on page 9. This quarter we saw total inflows of 1 trillion yen, comprising 270 billion yen from the investment trust business and 770 billion yen from the investment advisory and international businesses. The graph on the bot
Slide 11: Wholesale results
Net revenue increased 30 percent to 172.7 billion yen and income before income taxes improved from last quarter to 25 billion yen. The improvement comes as the last quarter was impacted by the 65.4 billion yen loss related to transactions with a US client. Looking at net revenue by region on the bot
Slide 12: Global Markets revenues
Second quarter net revenue in Global Markets increased 41 percent quarter on quarter to 137.2 billion yen. Equities revenues jumped 7.3 times from last quarter to 66.5 billion yen as the last quarter included the loss and because Japan and AEJ revenues both increased. Fixed Income revenues were 70.7
Slide 13: Investment Banking revenues
Turning now to page 12 for Investment Banking, revenues remained strong for the fourth straight quarter at 35.4 billion yen. M&A had another good quarter and the sustainability-related deals shown in green on the top right as well as cross-border mandates contributed to revenues. The Japan ECM busin
Slide 14: Non-interest expenses
Firmwide costs increased 9 percent to 300.4 billion yen. Notably, Other expenses shown on the second row from the bottom increased 60 percent quarter on quarter to 76.9 billion yen. While the 9.3 billion yen loan-loss provision booked last quarter was not present this quarter, we booked a provision
Slide 15: Financial position
As shown on the bottom left, there is no real change to our financial position from June with our September- end Tier 1 capital ratio at 20.2 percent and CET1 capital ratio at 17.6 percent. That concludes the discussion of our second quarter results. 14
Slide 16: Concluding remarks on results and businesses
This quarter’s results unfortunately included an impact to our bottom line by the provision booked for legacy transactions from before the global financial crisis. At the same time, in our core businesses, Retail saw recurring assets and recurring revenue hit a record high and net inflows into inves
Slide 17: Financial Supplement
Financial Supplement 16
Slide 18: Consolidated balance sheet
Consolidated balance sheet (billions of yen) Assets Total cash and cash deposits Total loans and receivables Total collateralized agreements: Total trading assets and private equity investments Total other assets’ Total assets 1. Including securities pledged as collateral 17
Slide 19: Value at risk
= Definition = From April 1, 2021, to September 30, 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: 10.8 (billions of yen) Equity Interest rate 22.4 8.6 12.0 8.5 86 38
Slide 20: Consolidated financial highlights
1. Full year Quarter (billions of yen) (billions of yen) 300 > 2179, 10% 200 20% "=== Net income (loss) 2% 2 pate attributable to Nomura =~ "i wt Boldigs, im CNHI") 469 5% 00) og ase 7% _ | ‘_— ° 0% =O om ROE (%) 450 -100 “1854 -300 -200 “Frcs. rateo2t 200 8 2 Net revenue 12878 — 1,4019 309.0 402.4
Slide 21: Consolidated income
Full year Quarter _“— mace errata ge to Revenue Commissions 308.8 376.9 92.3 96.7 102.4 829 6 Fees from investment banki 103.2 108.7 27.0 36.1 34.7 35.7 33.9 Asset management and portfolio service fees 238.2 230.0 57.4 58.6 60.3 64.0 67.2 Net gain on trading 356.6 310.0 131.5 136.4 -96.9 52.0 91.4 G
Slide 22: Main revenue items
Full year Quarter 196.5 262.3 61.0 65.5 728 82 717 144 143 29 34 36 37 40 67 es 193 181 174 144 1.2 2 6 94 96 86 66 88 308.8 369 23 96.7 1024 82.9 H6 14.0 06 10.5 10.4 82 10.0 10.3 35 BA 57 64 W 13 64 416 78 67 137 126 13.1 13.7 24 72 44 56 62 53 38 103.2 108.7 70 36.1 347 BT 39 150.5 190.2 76 372 4
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 (billions of yen) ‘Fram02t Retail 49.4 92.3 22.8 28.3 261 19.0 17.0 Investment Management 33.6 91.0 12.1 21.5 35.2 44.9 15.0 Wholesale 92.2 64.3 65.5 76.9 -165.9 -28.4 25.0 Three business seg
Slide 24: Segment Other
Income (loss) before income taxes’ Full year Quarter (billions of yen) 150 100 94.4 20 187 Net gain (loss) related to economic ‘hed actions _ 17.5 115 -5.0 14 13.5 34 38 Realized gain (loss) on investments in equity securities held for ‘ 66 17 Ot o7 02 02 0.0 Equity in earnings of affiliates 35.0 16
Slide 25: Retail results data
Full year Quarter (billions of yen) “Prowse ee Commissions 153.2 1877 466 493 510 386 356 18% 38% OF which, stock brokerage commission 612 926 202 248 259 178 178 AS AB.1% Of which, commissions for distribution of trusts 66.9 68.4 196 189 160 144 A 26% 43.2% Sales credit 568 584 144 168 144 116 19 2
Slide 26: Retail client assets
Retail client assets * Other = Foreign investment trusts ‘= Bond investment trusts ‘= Stock investment trusts = Domestic Bonds * Foreign currency bonds = Equities Equities Foreign currency bonds Domestic bonds' 25
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 1.200 900 900 800 60 ari 35 ' os O ° : wm = -300 -300 195 14 429 600 600 Fvaneaa Pr ramet i - ° 26 26
Slide 28: Number of accounts
Number of accounts ((mousands) _Fyaoig20 Fyaoan21 Accounts with balance 5,319 5,329 5,323 5,333 5,329 5,348 5,342 Equity hokding accounts 2,920 2,927 2,952 2,939 2,927 2,924 2,923 NISA accounts opened (accumulated)' 1,737 1,791 1,753 1,761 1,791 1,820 1,828 Online service accounts 4,703 4,895 4,766
Slide 29: Investment Management results and assets under management
Full year’ Quarter’ . Faz Fema (ottens of yen) ‘Frapiazo Framay2t ee a ee revenue 121.5 111.9 273 28.8 299 28.0 23.3 44% 7.2% Investment gain/loss 136 51.2 28 10.6 24.2 35.5 61 85.7% 82.3% Net revenue 107.9 163.1 301 39.4 54.0 63.5 M43 45.9% 14.2% Non-interest expenses 744 72.1 18.0 178 18.8 18.6 19
Slide 30: Asset inflows/outflows by business
Asset inflows/outflows by business’ Full year Quarter ee | Przatoza | Frama i - * Investment trusts business 4,788 2,753 563 588 393 346 267 of which ETFs 2,133 2,241 618 203 268 344 28 Enestaars aaeny sed 302 883 633 678 765 128 m7 Total net asset inflow 2,090 1,870 70 1,266 373 474 4,039 Domestic
Slide 31: Wholesale results and revenue breakdown
Full year Quarter (billions of yen) i rr A ee rere! ee oe ae ea Net revenue 601.4 132.8 172.7 Non-interest expenses 566.4 627.1 1548 1463 165.2 161.1 147.7 83% 48% Income (loss) before income taxes 922 643 655 769 165.9 28.4 25.0 : 61.9% Breakdown of Wholesale revenues Full year Quarter (billions of
Slide 32: Number of employees
Sep Dec Mar Japan 15,748 15,330 15,807 15,701 15,330 15,556 15,393 Europe 2,691 2,769 2,765 2,751 2,769 2,779 2,811 Americas 2,120 2,152 2,157 2,158 2,152 2.116 2474 Asia and Oceania’ 6,070 6,151 6,140 6,146 6,151 6,196 6,216 Total 26,629 26,402 26,869 26,756 26,402 26,647 26,591 1. Includes Powai o
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