Nomura Raises Annual Profit Target by 50 Percent Following Record Year

Nomura Holdings Inc. Raises Profit Targets Amid Record Earnings

Nomura Holdings Inc., Japan's largest brokerage, has raised its profit targets for the year ending March 2031, exceeding its previous goals. The company aims to achieve at least ¥750 billion ($4.7 billion) in annual pretax income, surpassing its earlier target of more than ¥500 billion. This increase is part of Nomura's strategy for stable growth, led by Chief Executive Officer Kentaro Okuda.

The brokerage posted a second consecutive year of record net income in the 12 months ended March, driven by Japan's financial market recovery and increased trading and investment banking activities. However, Nomura's stock price has declined by almost 4% this year, compared to gains at domestic rival Daiwa Securities Group Inc. and Japan's three largest banks.

Cost Cuts and Efficiency Measures

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As part of its cost-cutting initiatives, Nomura announced plans to reduce expenses by $500 million. The company aims to achieve this by leveraging artificial intelligence to streamline its operational model and reviewing its information technology architecture. This move underscores Okuda's focus on maintaining control over expenses while driving growth.

Wholesale Division Performance

Nomura's wholesale division, which houses securities traders and investment bankers, has lifted its return on equity (ROE) target for fiscal 2030 to more than 10%, up from the previous 8%-10%. The division, led by Wall Street veteran Christopher Willcox, achieved its highest pretax profit last fiscal year, driven by increased stock trading and merger advisory revenue.

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Private Markets Initiative

Okuda has emphasized the importance of steering Nomura toward private markets for growth. As concerns persist globally about the business of allowing investors to gain exposure to loans made by non-banks, Nomura plans to expand its private assets, with private assets accounting for up to 6% of its total assets under management by March 2031.

Asset Management Division

Nomura's investment management division is targeting an expansion of its assets under management by about a third to ¥180 trillion by March 2031. The division plans to increase its private credit assets under management to $5 billion or more by March 2031, from the current level of around $500 million.