Nomura Holdings (NMR) Q4 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to today's Nomura Holdings Fourth Quarter and Full Year Operating Results for Fiscal Year ended March 2023 Conference Call. Please be reminded that today's conference call is being recorded at the request of the hosting company. Do you have any objections, you may disconnect at this point in time. [Operator Instructions] Please note that this telephone conference contains total forward-looking statements and other projected results, which involve known and unknown risks, delays, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievement of the company to be materially different from the results, performance or other expectations implied by those projections. Such factors include economic and market conditions, political events and the investor sentiment, liquidity of secondary markets, labor and the volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of transactions.

With that, we would like to begin the conference. Mr. Takumi Kitamura, Chief Financial Officer. Please go ahead.

Takumi Kitamura

Good evening. This is Takumi Kitamura, CFO of Nomura Holdings. I will now give you an overview of our financial results for the fourth quarter and full year ended March 2023, using the document titled Consolidated Results of Operations.

Please turn to Page 2. First, the full year results. As you can see on the bottom left, net revenue declined 2% year-on-year to JPY 1,335.6 billion. Income before income taxes dropped 34% to JPY 149.5 billion. A breakdown of income before income taxes is shown on the bottom right. Segment Other, shown in the third row from the bottom, was JPY 73.4 billion, a marked improvement from last year, while three segment total was JPY 106.4 billion, down 48% year-on-year.

The past year was dominated by market uncertainty as volatility spiked and asset prices slumped on the back of sharp interest rate hikes by central banks. In March this year, the market fluctuated widely as bank runs led to the failure of some major regional banks in the U.S., and this spilled over into crisis in the European banking sector.

Amid this environment, retail reported income before income taxes of JPY 33.5 billion, a decline of 43% over last year. In the first half of the year, market uncertainty led to weaker investor sentiment and flow revenue dropped mainly from slower sales of stocks and investment trusts. At the same time, we were able to grow our recurring revenue assets such as discretionary investments, insurance and loans, and in turn, increase recurring revenue year-on-year. We did this by providing detailed consulting services taking a goal-based and portfolio management approach in order to protect our clients' assets and support their asset building over the medium to the long term.