Nomura Holdings, Inc. · TSE:8604
Nomura — Q3 FY2016/17 Earnings Presentation
33 slides from Nomura's earnings presentation, January 2017
Slide 1: Third quarter financial results overview
I will now give you an overview of our third quarter financial results. Please turn to page two of the document titled Consolidated Results of Operations.
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
As you are well aware, last year monetary policy took center stage around the world and we saw a number of events that could be considered historical turning points such as Brexit and the US Presidential election. In the latter half of the year, as uncertainty started to fade away, we saw renewed ri
Slide 4: Highlights
Highlights (billions of yen, except EPS and ROE) Net revenue Non-interest expenses Income before income taxes Net income? EPs? ROE? Fy2016/17 FY2016/17 ' { ' : ' 3Q. Q0Q YoY 1-3Q H YoY H ' H H H 368.6 +6% 44% i 4,054.1 Hl 6% H H q 272.7 i] +3% 10% i 813.6 i] -13% H ! H ! 95.9 17% +86% 240.5 +35% f '
Slide 5: Business segment results
WV Business segment results Net revenue and income (loss) before income taxes NOMURA 1 Peace ae oe PAM sisi Net revenue Retail 101.3 +18% 3% 2713 23% Asset Management 28.9 436% 14% 76.1 4% Wholesale 197.3 +10%_ 46% 568.1 -3% | Subtotal 327.5 414% +4% 915.5 9% Other 26.7 “45% 17% 129.2 [426% Ce a pS
Slide 6: Retail results
Let’s now take a look at each business in more detail. Please turn to page five for Retail. Net revenue increased 18 percent quarter on quarter to 101.3 billion yen. Income before income taxes grew 80 percent to 25.9 billion yen. As the stock market rallied and the yen depreciated after the US Presi
Slide 7: Retail client assets and discretionary investments
As you can see on the bottom left of page six, discretionary investments saw net inflows of 42.6 billion yen. Spurred on by market factors, client assets in discretionary investments grew to 2.4 trillion yen as of the end of December. The market rebound also drove an increase in client assets in inv
Slide 8: Asset Management results
We continued to book inflows into investment trusts and the investment advisory business in the third quarter, lifting assets under management to a record 43.2 trillion yen. This led to an increase in management fees, which also combined with gains related to American Century Investments and dividen
Slide 9: Collaboration with American Century Investments
As you can see on the bottom right, we are moving forward with various collaborative efforts with American Century Investments, or ACI, the US company we invested in last May. In November, we set up the US Value Strategy Fund managed by ACI and targeted at Retail investors in Japan. A Japanese pensi
Slide 10: Wholesale results
Net revenue increased 10 percent quarter on quarter to 197.3 billion yen. The Americas and AEJ had a good quarter. Fixed Income was the main driver of revenues as FX and the Rates businesses delivered resilient performance. Despite making bonus provision in line with pay for performance, we continue
Slide 11: Global Markets results
Global Markets reported net revenue of 173 billion yen. Fixed Income net revenue increased 18 percent to 117.3 billion yen on strong performance in Rates and Emerging Markets FX. As you can see in the heat map on the top right, the Americas reported solid performance in Rates and FX and AEJ had a go
Slide 12: Investment Banking results
As you can see on the top left, third quarter net revenue increased 2 percent quarter on quarter to 24.2 billion yen. Gross revenue, which represents revenues before allocation to other divisions, was roughly unchanged at 41.7 billion yen. Japan revenues declined as equity financing by Japanese corp
Slide 13: Non-interest expenses
Third quarter non-interest expenses were 272.7 billion yen, which as you can see represents a steady decline in expenses compared to a year ago. However, third quarter expenses were up 3 percent quarter on quarter due mainly to yen depreciation and an increase in non-personnel expenses such as busin
Slide 14: Robust financial position
Total assets were 43.1 trillion yen and shareholders’ equity was 2.8 trillion yen. Our Tier 1 capital ratio was 18.5 percent and our common equity Tier 1 ratio was 17.6 percent, both down slightly from September due to yen depreciation which caused risk weighted assets to increase by 900 billion yen
Slide 15: Summary and recent performance
To sum up, 2016 was marked by several major events that shook the markets. However, especially in the third quarter, we delivered an overall solid set of results well-balanced across all regions and businesses. In the past, Nomura relied heavily on its Japan business, in particular Retail. But by fo
Slide 16: Financial Supplement
Financial Supplement
Slide 17: Consolidated balance sheet
(billions of yen) Assets Total cash and cash deposits 3,899 Liabilities Short-term borrowings Total payables and deposits Total loans and receivables 2,970, Total collateralized financing Trading liabilities 1. Including securities pledged as coleteral, Total collateralized agreements 15,078 Other l
Slide 18: Value at risk
= From April 1, 2016, to December 31, 2016 (billions of yen) = Definition ~ 99% confidence level ~— Maximum: 6.7 — 1-day time horizon for outstanding portfolio — Minimum: — 3.4 — Inter-product price fluctuations considered — Average: 46 Equity 1.0 0.9 41.7 0.9 07 0.9 1.4 Interest rate 4.2 3.8 4.9 3.
Slide 19: Consolidated financial highlights
1 Consolidated financial highlights NOMURA Full year Quarter (billions of yen) (billions of yen) 300, 86% 9% 100 8.1% 85% » 9% 20 73% 2 mmm Net income (loss) 200 # 8% attributable to NHI 49% 612) shareholders 40 | em ROE(%_ (%) = PT 46.8| a 0 : | 0 -20 0% Net revenue 1,604.2 1,395.7 354.9 280.1 338.
Slide 20: Consolidated income
(billions of yen) Full year Quarter Revenue Commissions 453.4 432.0 102.3 87.8 76.3 74.6 86.3 Fees from investment banking 95.1 118.3 20.0 29.0 17.3 23.4 23.7 Asset management and portfolio sernice fees 203.4 229.0 57.8 53.4 52.6 52.1 55.1 Net gain on trading 531.3 354.0 105.2 61.5 140.4 118.8 108.4
Slide 21: Main revenue items
Full year Quarter Fy20tg/t6 FY20NG/IT (iene ym es ee Stock brokerage commissions 252.8 275.0 63.7 61.3 48.4 47.0 57.5 Other brokerage commissions 19.6 23.3 54 58 43 3.4 43 Commissions for distribution of investment trusts 134.3 89.5 20.8 12.4 15.8 17.6 19.4 Other 46.8 44.2 12.4 83 77 6.6 5.4 Total 4
Slide 22: Income before income taxes by segment and region
ein Col Adjustment of consolidated results and segment results: Income (loss) before income taxes Full year Quarter feniens yen) Prats race | 300 40 10 8 Retail 161.8 127.6 27.8 12.2 8.7 14.4 25.9 Asset Management 32.4 36.7 10.7 5.8 12.2 74 14.0 Wholesale 82.2 15.4 99 -22.8 46.6 39.3 47.4 Three busi
Slide 23: Segment Other
Income (loss) before income taxes Full year Quarter (billions of yen) 50.0 40.0 30.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 Net gain (loss) related to economic 46.0 16.1 58 = 13.1 hedging tatissctianis 16.1 64 0.6 8.5 12.0 Ad 16.9 bse elt br operatny puree aq 02 0.0 0.0 06 O14 04 Equity in earnings of affi
Slide 24: Retail related data (1)
NOMURA Retail related data (1) Full year Quarter (billions of yen) Commissions Of which, brokerage commission 81.8 78.9 18.0 14.4 13.4 124 19.8 59.8% 9.7% Ofvwhich, commissions for distribution of investment trusts 134.9 93.6 22.0 143 76 20.0 24 55% 4.1% Sales credit 106.4 86.4 232 75 18.6 199 23.0
Slide 25: Retail client assets
1. Retail client assets (trillions of yen) 120 409.5 108.8 108.0 = Other 100.6 100.6 99.1 00 95.3 = Foreign investment trusts 80 = Bond investment trusts Stock investment trusts 60 = Domestic bonds 40 Foreign currency bonds 44 = Equities oO” Equities 67.2 60.2 67.4 60.2 55.8 59.6 66.7 Foreign curren
Slide 26: Net inflows of cash and securities
Net inflows of cash and securities’ Full year Quarter 500 1,500 5 4,000 4 (billions of yen) 997 1. Cash and secunties inflows minus outfiows, excluding regional financial institutions, (billions of yen) 1,000 500 319 | a 43 -356 “ats -338 25 25
Slide 27: Number of accounts
Number of accounts ‘mowsens®) Be Ee ES ee ee ee Accounts with balance 5,294 5,389 5,384 5,389 5,390 5,384 5,383 Equity holding accounts 2,719 2,827 2,796 2,827 2,842 2,856 2,839 Nomura Home Trade / Net & Call accounts 4,216 4,412 4,384 4,412 4,443 4,470 4,497 New Individual accounts / IT share’ Full
Slide 28: Asset Management related data
Full year Quarter —FY2016 FVQONGZ Cans yen Pee ae Se a a ae Net revenue 92.4 95.4 25.3 20.3 25.9 21.3 5 35.9% 14.1% Non-interest expenses 60.3 58.7 14.6 14.5 13.7 13.8 7.8% 2.2% Income before income taxes 32.1 36.7 10.7 5.8 12.2 74 88.2% 30.4% Assets under management by company Nomura Asset Manageme
Slide 29: Asset inflows/outflows by business
Asset inflows/outflows by business’ Full year Quarter (eaters en) eee SS Investment trusts business 3,418 2,717 157 412 423 6 1,038 of which ETFs 843, 2,339 102 838 24 477 279 Investment advisory business 50 2,038 646 92 -169 344 95 Net asset inflow 3,469 4,755 803 320 -592 349 1,132 Domestic public
Slide 30: Wholesale related data
Full year Quarter mene rami remene agNg aeg O — 3Q00 AQ 12 8 Net revenue 7899 720.3 186.0 136.2 190.9 179.9 197.3 Non-interest expenses 707.7 704.9 176.0 1690 144.3 140.6 149.9 6.6% 14.9% Income (loss) before income taxes 82.2 15.4 99 22.8 46.6 39.3 47.4 20.7% 4.8x Breakdown of Wholesale revenues Fu
Slide 31: Number of employees
Japan 15,973 16,083 16,282 16,083 16,792 16,543 16,450 Europe 3,485 3,424 3,433 3,424 3,170 3,147 3,063, Americas 2,449 2,503 2,501 2,503 2,481 2,297 2,279 Asia and Oceania’ 6,765 6,855 6,853 6,855 6,769 6,667 6,606 Total 28,672 28,865 29,069 28,865 29,212 28,654 28,398 1. Includes Powal office in i
Slide 32: 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 33: Nomura Holdings, Inc.
Nomura Holdings, Inc. www.nomura.com