NMR

• Overall Structural Reform Progress

  • Benefits of multi-year structural reforms are now reflected in performance, with strong progress toward the 2030 management vision.
  • Group profit generation is now more balanced across divisions, with stable recurring revenues expanding roughly 60% year-over-year, improving overall profit quality.
  • Q1 2027 group return on equity (ROE) reached 15.4%, the highest reading since the 2020 COVID Q1, after management raised 2030 targets earlier this year.
  • Pre-tax income from the three international regions hit a record high since the 2008-09 global financial crisis, with sharp growth in priority international business areas.

• Wealth Management Highlights

  • All-time high market levels in major equities drove high-quality client flow growth, supporting recurring revenue expansion. Solid cost controls delivered a 49% pre-tax profit margin, with the recurring revenue cost coverage ratio reaching 76%, steady progress toward the 2030 target.
  • Investment trusts and discretionary investments (key recurring revenue drivers) posted 22% and 38% sales growth quarter-over-quarter, respectively, while insurance sales rose 36% on strong demand for pension and estate planning.
  • Workplace client assets, a new key performance indicator, reached an all-time high of 10 trillion yen at quarter end.

• Investment Management Highlights

  • Solid performance from American-centric investments and the removal of prior quarter one-time impairment and acquisition costs drove the strong profit increase. Collaboration between Japanese and overseas acquired operations has generated faster-than-expected revenue contributions, with strong inflows to new actively managed emerging market equity funds.

• Wholesale Highlights

  • The revenue to modified risk-weighted asset (RWA) ratio reached 9.3%, supported by flexible resource allocation and disciplined opportunity capture under the division's self-funding framework. Revenue sources are becoming increasingly diversified, with growth in equities, structured products, and international wealth management.
  • Investment Banking maintained its top league table position for equity capital markets (ECM) in Japan, with strong activity in renewable energy M&A advisory, a key priority area.

• Banking Highlights

  • The new Deposit Sweep Service launched on April 27 has driven steady growth in deposit balances and account numbers via collaboration with the wealth management division, laying groundwork for future long-term growth. Investment trust trust and agent service revenue remained solid, supported by new product launches and favorable market conditions.

• Management reaffirmed the recently updated 2030 targets: a ROE target range of 10% to 12% or higher, and minimum annual income before income taxes of 750 billion yen.
• Management expects some seasonal slowdown in wholesale net revenue after the very strong Q1 2027 performance, particularly in equities, but notes the divisional deal pipeline remains favorable overall.
• Wealth management net revenue has remained roughly on par with Q1 levels since July, with continued strong inflows to long-term diversified investment products.
• Management expects higher market volatility in the second half of fiscal 2027 driven by the U.S. midterm elections and global monetary policy trends, and plans to capture emerging opportunities while maintaining strict risk and cost discipline.
• In the medium to long term, Nomura plans to continue balanced growth across all Wholesale product lines, with targeted additional growth for the equities business.

1. Wealth Management: Net revenue increased 9% quarter-over-quarter to 145.4 billion yen, with income before income taxes up 16% to 71.1 billion yen. This segment contributed 23.3% of total group net revenue. Recurring revenue assets hit an all-time high of 31.7 trillion yen, with a net inflow of 539.6 billion yen in the quarter.
2. Investment Management: Net revenue rose 14% quarter-over-quarter to 98.3 billion yen, and income before income taxes jumped 148% to 45 billion yen (the best performance since the segment's 2021 founding). This segment contributed 15.8% of total group net revenue. Assets under management reached an all-time high of 156.4 trillion yen.
3. Wholesale: Net revenue increased 20% quarter-over-quarter to 369.1 billion yen, with income before income taxes up 116% to 93.3 billion yen (the best performance since the segment's 2010 founding). This segment contributed 58.5% of total group net revenue. Within Wholesale, Global Markets net revenue rose 26% to 318.7 billion yen (equities up 41% to 179.4 billion yen, fixed income up 11% to 139.2 billion yen), while Investment Banking net revenue fell 9% quarter-over-quarter to 50.4 billion yen (an all-time high for a Q1).
4. Banking: Net revenue grew 5% quarter-over-quarter to 15.2 billion yen, and income before income taxes rose 19% to 3.6 billion yen. This segment contributed 2.4% of total group net revenue. Total group net revenue across segments was 628 billion yen, with group-wide expenses up 1% quarter-over-quarter to 475.2 billion yen. The common equity capital ratio at quarter end was 12.9%, up 0.1% from March 2027.

• Forward-looking projections are subject to material risks that could cause actual results to differ materially from expectations, including: unfavorable economic and market conditions, geopolitical political events, shifting investor sentiment, secondary market liquidity levels, interest rate and currency exchange rate volatility, security valuations, competitive conditions, and the size, timing, and volume of client transactions.
• The group maintains a policy of avoiding excessive concentration of financial resources in the Wholesale division to manage balance sheet and concentration risk, even when client demand for Wholesale products is strong.
• Increased near-term market volatility from geopolitical tensions and equity market corrections creates uncertainty for near-term revenue performance.

Q: July wholesale revenue was seasonally slower than Q1. How is it performing year-on-year, is Q1's strong equity momentum sustainable, and will the firm adjust capital to support shareholder returns as profits grow? / A: July's summer seasonal slowdown is typical, and July 2027 revenue is roughly flat year-over-year. While Q1 equities benefited from unique favorable conditions that will see some normalization, the baseline for equities revenue baseline has shifted upward long-term. It is too early to discuss dividend payouts after just one quarter; management will continue balancing growth investment and shareholder returns when making future capital adjustments.

Q: What drove Q1 equity revenue growth breakdown, and how does Nomura approach balance sheet growth and risk management given available leverage headroom? / A: Detailed breakdowns are not disclosed, but growth was split roughly 50/50 between finance/derivatives/prime business and trading/flow/cash/structured products, with contributions from expanded product lines across the US and Asia. While there is leverage headroom, the Wholesale division operates under a self-funding framework that limits resource growth to focus on high-margin opportunities, and the group avoids over-concentration in Wholesale to preserve capital for other business priorities like Investment Management and Banking growth.

Q: The Q1 revenue to RWA ratio hit a record high with little change in overall RWA. How has the risk asset mix changed, and what will the total annual cost of the upcoming headquarters relocation be? / A: Short-term resource allocation was shifted to equities to capture strong market demand, which is evidence that the self-funding framework is working well. The medium-long term balanced mix target across product lines has not changed, with equities targeted for faster long-term growth. Relocation costs will be recognized gradually over this fiscal year and next, with a relatively small impact on full year performance, and specific numbers will be disclosed at an appropriate time.

Q: Asia-Oceania international income hit an all-time high, what factors drove this and will this level be sustained, and why does EMEA continue to post losses? / A: The strong performance was driven by higher equity, FX, and credit revenue, plus a large contribution from the maturing International Wealth Management business, which has grown after several years of restructuring. This segment is expected to deliver stable ongoing growth going forward. EMEA operates partially as a global booking hub for the international wholesale business, so it absorbs shared costs that would not appear in other regional results. Losses have narrowed over the past two to three years, and the business is growing gradually, and overall wholesale performance should be viewed at a global product level rather than by individual region.