Nomura’s Profit Falls Less Than Expected on Investment Banking

Apr 30, 2014 8:05 am ET

April 30 (Bloomberg) -- Nomura Holdings Inc.’s fourth- quarter profit fell less than analysts estimated as higher income from investment-banking fees and trading helped to make up for a drop in brokerage commissions.

Net income declined 26 percent to 61.3 billion yen ($598 million) in the three months ended March 31, from 82.4 billion yen a year earlier, Japan’s biggest securities firm said in a statement today. That beat the 41 billion-yen average estimate of 11 analysts surveyed by Bloomberg.

The first profit drop in seven quarters came as Japanese stocks went from being the best performers among major markets in 2013 to the worst this year, weakening Nomura’s domestic brokerage operations. Chief Executive Officer Koji Nagai is seeking to expand assets under management in the retail unit and attract new investors rather than focus on commissions based on transaction volume.

“In January, Nomura shifted to a business of consulting with investors to build their long-term holdings, and it’s taking time for sales reps to respond,” Masao Muraki, an analyst at Deutsche Securities Inc. in Tokyo, said before the results. “Investment trust sales have slowed significantly.”

Nomura will raise dividends and spend as much as 70 billion yen to buy back shares, it said in the statement. The Tokyo- based firm will pay a 17 yen-a-share dividend for the year ended March 31, up from 8 yen a year earlier.