Nomura quarterly profit falls on Macquarie acquisition cost; JGB yield surge impact limited
A Nomura logo is pictured at their office in the Manhattan borough of New York City, New York, U.S. June 23, 2017. REUTERS/Carlo Allegri
TOKYO, Jan 30 : Japan's Nomura Holdings on Friday said third-quarter net profit fell nearly 10 per cent from a year earlier, weighed by expenses related to its $1.8 billion acquisition of investment management assets from Australia's Macquarie Group.
Still, the country's largest investment bank and brokerage reported revenue growth across its four business lines.
It also said it expects limited impact from a surge in Japanese government bond yields, reflecting efforts to build a stable profit base less susceptible to market movement.
Profit for October-December fell to 91.6 billion yen ($595 million) from 101.4 billion yen in the same period a year prior.
The quarter represented another strong showing for Nomura's wholesale division, home to the firm's investment banking and trading arms, as it capitalised on rising global equity prices and a buoyant dealmaking market at home.
Record-high share prices in both Japan and the U.S. pushed revenue from equity products up 21 per cent while investment banking revenue rose 11 per cent, boosted by M&A advisory fees and major capital raises such as the listing of SBI Shinsei Bank.
"Long term interest rates have been volatile and rising fast but we don't see this as having a major impact on our investment banking pipeline," Chief Financial Officer Hiroyuki Moriuchi said at a press briefing.
"With rapid foreign exchange rate movement, there's been something of a slowdown in our rates business but our markets business is global and overall the impact is limited," he said.
Nomura has sought to establish a more stable revenue base in recent years through its wealth and investment management units.
The investment management arm recorded a 33 per cent rise in net revenue with asset management fees at an all-time high. However, cost associated with the Macquarie acquisition is still likely to impact profit over the next two quarters, Moriuchi said.
The wealth management division dominates over domestic rivals. Its income before income tax rose 31 per cent.
The business has grown steadily as more savers seek higher returns on assets now the economy has made a long-awaited exit from deflation.
($1 = 153.8700 yen)
