Nomura, the largest investment bank and brokerage in Japan, announced on Friday that it has delivered a record annual profit for the second year running and that, so far, the U.S.-Israeli war on Iran has not altered the structural growth drivers in its domestic market.
The bank has pursued a multi-year strategy to shift its revenue mix toward fees that are steadier and less exposed to swings in market activity. That approach supported results for the fiscal year and the latest quarter, executives said.
Quarter and year results
For the January-to-March quarter, Nomura's net income increased 3% from a year earlier to 73.9 billion yen, which is equivalent to $462.60 million using the company-reported exchange rate of $1 = 159.7500 yen. On a full-year basis, net income rose to 362.1 billion yen from 340.7 billion yen in the prior year.
The wholesale division, which covers the firm's investment banking and trading operations, posted its highest annual revenue since it was created in April 2010. The firm also benefited from flow fees produced by market volatility during the quarter.
Management view on geopolitical risk
Chief Financial Officer Hiroyuki Moriuchi cautioned that markets have generally been favourable to date but acknowledged a range of present risks. He noted that while some decisions in M&A and equity capital markets could be delayed, the mid- to long-term structural issues confronting Japanese companies - including a declining population and ambitions to expand overseas - remain unchanged by developments in the Middle East.
Business positioning
Nomura retains a dominant position in Japan's wealth management market and draws on a strong base of recurring fee revenues. Management described the firm's emphasis on fee-based income as a deliberate effort to create revenue streams less vulnerable to sharp market fluctuations.
Contextual note
The company and its executives framed the results as evidence that their strategy to prioritise stable fee income is yielding resilience, even as geopolitical tensions create short-term uncertainties for deal activity and capital markets timing.
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