Nomura sees $1bn revenue boost from equities, wealth

Bloomberg

Nomura Holdings Inc sees a potential revenue boost of $1 billion or more from a deeper push into areas including equities, private markets and managing money for the rich, according to the firm’s chief
executive officer.
“Our wholesale business platform allows us to seize on profit opportunities with certainty whenever the market moves,” Kentaro Okuda said at an investment forum on Tuesday, referring to the division that houses investment banking and trading operations. “Not only do we want to maintain it but also
bolster its quality.”
Japan’s biggest brokerage is seeking new revenue streams as rising global interest rates and market volatility slow key pillars of Nomura’s business, from brokerage fees to stock underwriting. Profit for the three months through September fell short of analyst estimates, as a surge in fixed income trading couldn’t offset weakness across the rest of the firm.
Nomura plans to replicate its success in the Americas to build out the equities business in other regions, while accessing new fee pools in advisory and international wealth management, according to a presentation. At the same time, the firm will review some administration costs and its location strategy for the wholesale business, according to the document.
“We need to raise revenue from equities, advisory and wealth businesses in order to boost returns from our overall portfolio as well as build a durable platform against the external environment,” Okuda said.
Okuda has been seeking to revive Nomura’s fortunes after some of its most challenging years that saw the broker take a roughly 311 billion yen ($2.2 billion) hit from its dealings with family office Archegos Capital Management LP and face costly litigation in the US.
Nomura’s mainstay retail business, which sells financial products to individual investors at home, has been under particular pressure after trailing smaller rival Daiwa Securities Group Inc. for three quarters in a row in pre-tax income. The firm sees room to cut 20 billion yen in retail costs by the end of March 2025, according to the presentation. This could include hiring restrictions to reduce headcount as well as closing branch ATMs.
The move signals Okuda’s renewed focus on revamping a division that has long worked as a shock absorber against overseas mishaps, including the Archegos blowup and Nomura’s ill-fated acquisition in 2008 of Lehman Brothers Holdings Inc. assets.