Nomura Holdings, Inc. Q2 FY2026 earnings call

Management Statement and Operational Highlights

• Group-wide net revenue JPY 515.5 billion, down 2% QoQ. Income before income taxes fell 15% to JPY 136.6 billion. Excluding real estate gains, net revenue up 10% and net income up 40%.
• First half of fiscal year: Income before income taxes up 26% YoY to JPY 296.9 billion, net income up 18% to JPY 196.6 billion.
• Stable revenues from Wealth Management, Investment Management, and Banking are growing. Recurring assets in Wealth and Investment Management are strong, Banking expanding recurring business.
• Phishing scams led to JPY 4.8 billion negative impact on profit in Q2, but security measures improved and impact expected to be smaller going forward.

Segment Performance

• Wealth Management: Net revenue increased 10% to JPY 116.5 billion, income before income taxes grew 17% to JPY 45.5 billion. Recurring revenue assets had a net inflow for the 14th consecutive quarter, reaching an all-time high.
• Investment Management: Net revenue was JPY 60.8 billion, up 20%; income before income taxes was JPY 30.7 billion, up 43%. Assets under management reached an all-time high with 10 consecutive quarters of net inflows.
• Wholesale: Net revenue was JPY 279.2 billion, up 7%. Global Markets net revenue up 6%, Investment Banking net revenue up 15%. Cost-income ratio improved to 81%.
• Banking: Net revenue was JPY 12.9 billion, flat; income before income taxes fell 12% to JPY 3.2 billion. KPIs like loans outstanding and trust balance remained high, but higher costs affected profit.

Guidance

• Expect to pay dividend of JPY 27 per share for period ended September 2025, dividend payout ratio 40.3%.
• Aim to maintain stable revenue growth and self-sustained growth in Wholesale.
• Plan to stick to shareholder return commitments of 40% dividend or above and total payout ratio of 50% or above.

Risks

• Phishing scams resulted in JPY 4.8 billion negative impact on Q2 profit. Security measures improved but market volatility risk remains.
• Concentration risk in SPPC business and need for careful due diligence on creditworthiness of transactions.

Question and Answer

Q: Regarding personnel expenses and CET1 ratio impact on buybacks A: Comp and benefits increased due to bonus linked to earnings and larger retirement payments in Wholesale. CET1 ratio to decline post-Macquarie acquisition, but will stick to shareholder return commitments.

Q: About market revenue, risk taking, and First Brands impact A: Credit risk in SPPC business requires selective deal making. First Brands impact on P&L negligible; private credit business portion small.

Q: On October revenue, FIG trends, and tax burden A: Wholesale revenue in October about same level as Q2. Fixed income normalized; tax burden technical, hard to detail.

Q: Concerning equity business trends, risk taking capacity A: Equities strong in regions, expecting normalization. Risk taking capacity depends on Wholesale performance and capital accumulation.

Q: Regarding Investment Banking pipeline and ROE A: Advisory pipeline strong, ECM normalizing. ROE above target, base earnings power improving, focusing on maintaining 8%+ ROE