Go West

30 April 2014 By Peter Thal Larsen Follow @Peter_TL

The Abenomics-inspired rally has fizzled, knocking the Japanese bank’s domestic business. But its investment banking arms in the United States and Europe are beginning to carry their weight. With healthy capital and a less hostile regulator, Nomura can continue to hold its own.

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Nomura reported its best full-year results in eight years as a revival in the Japanese bank’s wholesale division helped offset a domestic stock market slowdown.

The bank generated a pretax profit of 362 billion yen in the year to March, up from 238 billion yen in the previous twelve months.

Pretax profit in the domestic brokerage division was 192 billion yen, almost double the 100.6 billion yen Nomura earned the year before. In the asset management business, pretax profit was up 28.1 percent to 27.1 billion yen. In wholesale banking, pretax profit rose 56 percent to 112 billion yen.

For the March quarter, pretax profit was 88.6 billion yen, down 48 percent on the first three months of the previous year, but up slightly quarter-on-quarter.

Pretax profit in retail was 23.3 billion yen in the quarter, down 59 percent year-on-year and 51 percent on the three months to December.

In wholesale, however, pretax profit was 33.5 billion yen, up 20 percent quarter-on-quarter and down just 6 percent on the same period a year ago.

At the end of March, Nomura’s Tier 1 capital ratio was 13.3 percent. Fully adjusted for the introduction of Basel III, its capital ratio would be 12.2 percent.

The bank declared a year-end dividend of nine yen per share, taking its annual dividend to 17 yen per share. It also plans to buy back up to 100 million shares to return capital to shareholders.

Nomura’s announcement came after the close of trading in Tokyo. Nomura shares closed at 588 yen, down 2.7 percent.