TOKYO: Japan's Nomura Holdings posted its strongest quarterly profit in more than 17 years, lifted by the sale of a stake in an affiliate as well as trading gains and an improved performance from its wholesale division.
Net income for the country's biggest brokerage and investment bank came in at 138.6 billion yen ($1.3 billion) in the second-quarter, compared with a loss of 11.2 billion yen in the same period a year ago.
It also marks a third straight quarter of overall net profit and for its international business, a second consecutive quarter of pretax profit as efforts to cut costs bear fruit after a horror year last year when it made its first annual loss in decade.
Net revenue jumped 35.5% to 383.4 billion yen, with revenue from net trading gains surging 39% to 105.6 billion yen.
"While our bottom line was very much buoyed by the sale of shares in Nomura Research Institute, the main business didn't do too badly in a difficult market environment," Chief Financial Officer Takumi Kitamura told a briefing.
Nomura booked an extraordinary profit of 73.3 billion yen on the sale of a 13.5% stake in Nomura Research Institute Ltd .
Pretax profit for its wholesale division more than tripled to 18.9 billion yen helped by equities and investment banking and as cost cuts began to kick in.
Nomura announced a plan in April to slash more than $1 billion in costs from its wholesale business and shut some of its domestic retail branches. Kitamura said Nomura had achieved around 60% of the 140 billion yen in targeted cost cuts.
But its retail business saw net revenue decline 10% from a year earlier while pretax profit plunged 57% to 5.3 billion yen as investor sentiment worsened on the fallout from the U.S.-China trade war and as Nomura reviewed its sales structure.
Though its business is on a stronger footing last year, Nomura's reputation took another hit in May when regulators censured it for leaking information related to listing and delisting criteria to clients.
That led to the government leaving it out as an underwriter in a Japan Post share sale and Chief Executive Koji Nagai taking a 30% pay cut for three months. - Reuters
