Nomura's second-quarter profit rises 13% on growing wealth management fees

By Anton Bridge

TOKYO, Oct 28 (Reuters) - Nomura Holdings 8604.T, Japan's largest brokerage and investment bank, said on Wednesday that its second-quarter net profit rose 13% to 103.7 billion yen ($656.7 million), driven by steady growth in wealth management.

Its wholesale division's income grew 47% from a year earlier, boosted by equity trading and investment banking.

The trading results mirrored other global investment banks, where strong trading in equities offset a fall in fixed income as bond yields spiked during the quarter.

Fixed-income trading revenue fell 2% from a year earlier, while revenue from equities rose 19%. However, the results declined from the previous quarter, during which investor excitement over AI pushed stock markets in the US and Japan to record highs, helping to swell equity trading revenue.

“The first quarter was extremely strong, so this quarter’s results are a bit of a normalization,” Nomura Chief Financial Officer Hiroyuki Moriuchi said.

Nomura has been a major beneficiary of Japanese firms' more active fundraising efforts as they seek growth opportunities amid rising domestic inflation. Nomura topped both equity capital markets and debt capital markets league tables in Japan over the six months to the end of September, with revenue buoyed by the take-private move of Dentsu Research Institute and SoftBank Group's 9984.T record 1 trillion yen retail bond issuance.

The wholesale division has had a slower start to the third quarter, but its investment banking pipeline remains healthy, Moriuchi said.

While favourable market conditions have lifted profit over the past year, Nomura's wealth management division continued to grow as Japanese households steadily move away from cash and deposits toward higher-yielding investments.

Nomura has sought for a number of years to develop steady sources of revenue that are less impacted by market volatility and the wealth management division's recurring revenue reached a record high of 66.7 billion yen, up 30% from a year earlier.

($1 = 157.9100 yen)