Nomura (NMR) 29 Oct 202021 Q2 Earnings call transcript

Good day, everyone, and welcome to today’s Nomura Holdings Second Quarter Operating Result for Fiscal Year Ending March 2021 Conference Call. Please be reminded that today’s conference call is being recorded at the request of the hosting company. [Operator Instructions] During the presentation, all the telephone lines are placed for listen-only mode. The question-and-answer session will be held after the presentation. Please note that this telephone conference contains certain forward-looking statements and other projected result, which involve known and unknown risks, delays, uncertainties and other factors not under the company’s control, which may cause actual result, performance or achievement of the company to be materially different from the result, performance or other expectations implied by those projections. evaluations, and secondary political of transactions. market, currency rate, economics sentiments, and interest includes size, exchange of and liquidity level security factors market timing events conditions, investor rates, number Such and conditions of competitive and volatility that, begin conference. like to would we With the Mr. Kitamura, Takumi Financial please Officer, Chief ahead. go

In results will the joining half and first following us. for speaking. year you document results the March is Kitamura entitled I X. I and turn quarter for for my will the uploaded Thank operations. This be be to ending XXXX. presenting presentation, the consolidated second Page Please

XX%; investor banks, the Speaking subsided, saw indices equity bond market, driven there half and United recovery market prices pandemic towards and events strong level there the like Brexit, and with the and after market hopes JPYXXX.X half the introduction net There by backdrop and Page hand we market, was increase in products. is income region. JPYXXX.X These share. increase low March agency In rates and central pre-tax the products, was increased US September, billion, finance income highlights by mortgages was are This billion, economic The the income go year-on-year; needs highest volatility against pre-tax ended to continued equity in for bond income the sentiments, was with recovery of investor the base appropriate XXXX. first liquidity about ROE net EPS GAAP presidential of results, the we including there the the by JPYXX.X, The the half States segments first of activity. highest extensive X. billion, there bar of the election of XX.X%, Please of reassurance the market income first of in yield side JPYXX this left income for equity pre-tax along in since X%. from fixed Against inflow the year-on-year, in dislocation per plus revenue the half first the year improvement first the spread into appetite of of the half. of of and XXX% dividend insurance. date three was the was XX% some caused end by in the on by saw backdrop, primary were resumption JPYXXX.X provision

company. was the of can of billion total total the you accounting the term. three half JPYXX As an billion, the especially, for JPYXXX.X for regions total was of of the billion of first the was billion increase see, from – The and the JPYXXX.X the XX% Americas previous pre-tax income global, approximately driver JPYXXX.X the

increase year, wholesale As our on mentioned top in resources share. same the April in supporting continued the last at of five we conducted we Investor with businesses the review, time in to Under business These in profitability strategy improvement results business. currency global and equity and the rates, emerging our contributions the efforts initiatives great reduction business. US growth of able cost were in revenue the delivered portfolio Day corona pandemic while our the clients. made of global liquidity, provision market to we focused Asian Also

X.X term. JPYXX.X previous and income increased JPYXXX.X give billion. all billion, in fold On Income the of Income for the for was retail to fold the breakdown segment. was we areas. recovered right hand wholesale side, by previous pre-tax business X.X the year The

and steadfast stable And three in strength was improving is the in factor, a Asset income was year’s market revenues the deliver generated course, the by supported realignment a but has channel begun to in Of last branch to gradually segments Management, underlying positive integration deliver manner. results.

on going to Next, let QX, me Page highlights X. describe the for

because a on As slight QX, was high high pre-tax one-off fixed Nihonbashi redevelopment, the and for for the of but pre-tax the total top level QX. The recorded to JPYXX.X billion, billion income billion. the there partly and for half of markets JPYXX.X net X.X%, the global was record than for right, income revenue EPS In ROE more was the was rate, JPYXX.X decline, contributed billion, total indicated of revenue income JPYXX.XX. income maintained accounting the tax effective of reduction three annualized JPYXX.X

the business was an describe and year the for segments retail. income income, we JPYXX.X for first billion, ending As QX billion indicated But the increase; for after highest previous bottom XX% areas XX% to since was each JPYXX.X XXXX. Compared year, area, right, on the XX%. income March of business segments Page of negative the the for or JPYXX.X total the In X income billion revenue three pre-tax increase pre-tax saw and Q-on-Q, as Net the increased XXX%. three increase QX it Q-on-Q. the all

contacting being efforts all session, in clients, face-to-face model top on of And contributing, is are products telephone meeting, the results. As are online hybrid we’re facial now delivering promoted, and our activities through is also increased and the we contacts only evolving I also said email, services. but sales previous that, system, for using with primary not and these

QX investments June. insurance. X. basis bonds increase in and end improvement we level increased foreign a trust recorded has great revenue high been investment Page total the at equity seen sales equities primary since maintained. had look being Recurring on assets and bottom we indicated Q-on-Q saw deals There of on as increase and is recurring revenue in take saw and improvement a Please As has and in in left, the and discretionary

April. number total of trust is billion. of as who for clients, our inflow least saw the products especially ESG. market September of the to which cumulative more end billion, related of beyond was addition services net has and investment been bottom the left, was once elements, real than improvement, business, and global right. trust equities in In number investment And bottom by increasing Consulting sales estate previous on term. a clients or revenue was positive we the on active used XXX,XXX, related there The since This insurance JPYX.X at JPYXXX

Asset revenue American declined In related Management billion, JPYXX.X billion, X% Page X, was of the billion, there income increase. pre-tax JPYXX.X JPYXX.X JPYXX.X billion ACI previous XX%. and losses, the minus was by gains on Century excluding XX%; term, revenue so or

from funds high. Investment business redemptions in private in the the reported In business, XX advisory funds to to did launched market, the on August. and in partly booked shown infrastructure indicated the funds, funds, inflows equity as for alternatives turn as investment UCITS net a As The top Japan Page such billion the value inflows of Japan Please into related of on overseas trillion, full bottom Trust in over AUM were leading have because ETF left, outflows JPYXX.X we record left. and delivered fund of JPYXXX tailwind the JPYXXX there but equity ESG billion. inflows

Asset management has funds been under focused DC in assets on management for increasing plans.

our increased to can bottom was these Page and offering, share right, the wholesale. XX we on product nearly September XX.X%. to of management JPYX.X assets the funds under thanks Please As market broad see at turn has end AUM for trillion of

second fifth a JPYXXX.X the business was on revenue revenues. quarter quarter quarterly year-on-year and the best revenue but basis regions last Second highest represents lines down stronger revenues billion, JPYXXX.X record all and quarter, performance. the net reported from billion

the by net from bottom shows three see can left, we As revenue recent on region international the contributions regions. stronger

representing we JPYXX.X net was Americas billion, particular, In our the net quarter business total regions and for revenue was the accounting rebuilding Second international started of revenue from since three in revenues a of over quarter XX% billion, XXXX. JPYXXX.X wholesale record revenues. XX%

down JPYXXX high declined target. shown modified in XXXX of revenue RWA billion. For the was was solid. as billion. XX was just for had JPYXXX.X an net performance the XX% revenue FX and quarter revenue compared good in mortgages JPYXX.X grew and versus Fixed Rates products but target remained turn Please quarter, line. XX% Page Equities KPIs to EM income ahead revenue are around net about strong cost agency to by credit by revenue ratio net quarter region, X%. JPYXXX.X a KPI to percentage Global securitized income versus XX% XX% X.X% below over at our net and to XX% Both billion, billion. overview business last March of a Markets record target second were our of of

for XX% of for ECM Japan-related by cross six to As revenues you stronger the right, on business banking. on increased Revenues top see derivatives, border and from several also In quarter turn high significantly revenue increased Japanese map can revenues Page at Americas M&A heat were Net companies. from business size to JPYXX.X acted the Please up transactions this on derivatives. remained deal robust AEJ revenues solutions is on XX transactions and quarter-on-quarter executed our lead top investment for contributions driven DCM our transactions, of quarter Japan, strong. the reorganizations issuances estate while pointing equity ALF sales. transactions, we deals ECM multiple the bond had on quarter, and leading revenue we manager substantially. grew as Internationally supported both ECM real ECM And higher five a all year-on-year. and and net to Demand for by on billion.

top the several border business and right, on and domestic our M&A see through can you growth reorganizations transactions. supported strategies As Japan cross we clients’

expenses. were related in to September. information and to related and the ranked nine other XX% transactions last roughly related all Page for table the Compensation quarter. turn we in overview benefits, floor Occupancy for top increase reported quarter. and were last consultant of XX XX increased brokerage global relocation from up depreciation billion, Toyosu. non-interest processing and expenses, commissions one-off fees. Firm-wide expenses we JPYXXX.X unchanged X% Nihonbashi to result, and a of legacy an As from due to cost M&A an through lead months office Please to and expenses In communications from

position Page financial our Next, on XX.

repo JPYXX.X trillion sheet JPYX.X the was due trillion, mainly of the September Our up balance June, to at of transactions. end end from

right denominator trillion of the the the assets unchanged, position the up due trillion, in about JPYX.X as credit of while risk on the a X of capital by profitability. risk from Level reductions. at increased the percentage bottom Tier peak mainly spread March. our since red numerator end JPYXX.X to concludes lower positions. has Tier our Net first CETX overview XX%, which has at efforts both shows to was our X from bottom year, That Level the XX.X%, and to X market was In tailwinds assets to graph Tier of line underlying remained ratio loan-related tightening X June. which off quarter products, sold on ratio have second and last The September XX.X% X declined shown capital equation, second leading left, The from we capital end the As This capital the market mainly quarter, and our is see March. compared realign we securitized the eased platform results of down And end to because at results. to as our credit quarter is XX% the started capital trended improved business of assets, roughly

in and realignment strength instance, focused continued strong business resulted of in wholesale, For competitive our on revenues. portfolio areas

stronger has benefiting each weaker revenue we a And to effect. or Even levels. Wholesale one-off. quarter a Central to banks we are first continuing of performance continue monetary overall elections as performance at Brexit. an end announced Although such see earlier in very not the activity There macro was number into quarter easing. certain U.S. have of at our portfolio level with the who and we from events a level, the peers month, each demonstrated October second our U.S. that ahead, strong are quarter expect product of year. results this remained compared we are

controlling provide approaches risk our and costs. proposals. and to clients support realignment our continue while In we the and liquidity of stringently clients’ enhanced growth our will channels, retail, We the have following to strategies,

year. videos beyond client For and enhance for boarding relations going touch average on owner to we division second to company of compared a the half of clients, more email, points. space than actively in new and instance, using doubling and in increasing while corporate our This last are has content the the webinars and resulted

increase transactions at also volume email the number space, have the have quarter in levels. maintained online In involving active has the affluent October, increase office significantly leading head mass large a grown tools of seen and use support We second an in functions. clients. we to of revenues content In of

vigilant. wave will We second has to and the series of Globally, regions initiatives. remain work become some must pandemic the continue in new on we

ensuring We the will continue to prioritize our continuity while the institution communities clients, participating business of as capital people, Thank safety you. a financial markets. in and

ahead, by be question You Please Instructions] a are Watanabe-san. Daiwa session. now go in Securities. will [Operator Watanabe-san The Q&A of first

This is two questions. Daiwa Watanabe of Securities. I have

declined a of First on What to capital, factor XX previous is With your momentum. that buyback, strong do assets didn’t was the think share the favorable, the to conduct quarter that the XX. comparison well, what equity And of in Thank comparison reason? you conduct States. And not questions. two behind? United were what especially Secondly, why you all, market, a but in did this Page the you was buyback? achieved environment JPYX.X are the on low, you trillion, material, Page On was U.S. global in on by behind? trend the did It factors peers, you my you. risk sustainable? Those seems prices

for much Thank you very the question.

rebound the At a the reason which of the why is market all, of RWA factor use is in First the and dislocation reduction declined, the known you. there April and increased risk. down XX we of March, RWA average the March saw is market of the March, on RWA. to was market end disappeared. of sharply, but dislocation initial indicator big of market well question, The calming your after days The we impact

which reason. the And origination reduction the and risk has contributed that losses is major declined that incurring to March RWA. was So of around position,

is question not second we reasons conduct The on why the did buyback.

the As in buyback. decided Investor the peers cases have been our not of daily at increasing has countries to new there also share previous do mentioned And western we COVID-XX. U.S. on basis Day,

the momentum. loosen our So we cannot at grips

JPYXX We’re not has announced. but bearish, dividend of saying been we’re

shareholders. benefits third the and been offering it’s the is XX in highest highest to the interim our JPYXX years, are dividend. dividend we interim So past

we So feel sense, the that momentum be momentum in that – QX. will the sustained high in

to higher. ratio and total committed payout XX% we’ve of So

So the right share find if to would buyback. we a we timing, like conduct

U.S. significantly, U.S. this and the of increased market approaching equity, that with investors reason? trend equity we strength the feel in the was there sustainable? Why especially market, strong appetite. quite Finally, in requirement presidential what’s election, the hedge whether is and

As States this have thinking and been been inquiries equity in United team and we saying, from our derivatives we’ve great orders customers. a the team after looking there has many around

lead revenue. was to opportunities. active and a we were from that able there to customers flow risk position making capture took the from flow So very We market to our good and

are the of the of strength course, but it So ahead? in would franchise. trend will of quite this continue partly confident months the of depend on terms in the Of the market, robustness franchise, we

have a customer as well platform lineup. We diverse as diverse product

So share down, opportunities can I we market in equity of question. hope, I don’t that know we the your think whether the or market. prices but different capture we will answered derivative go up the phases in

shareholder you together about would but hold the the delivered benefits, the results Thank policy I announcement true? and that fiscal for speak a the XX% point, saying you rather total you QX consider QX on Are and of first QX end follow-up QX much. quarterly the question be ratio you will results on very have by that than of at And payout still like buyback. to year? said that, this to does

said by announced means yearly the I year, fiscal When that of we the by results. end the the time

by we the time our the to results year So commitment want XX% announced total fiscal payout we ratio. of fulfill

First Thank half very that and will unchanged. the you much. serve and results philosophy as basis year-end remains

Japan. we Sachs, Mr. Next Nakamura have Nakamura, please. Mr. Goldman from

I’m questions. for Nakamura much Japan. questions. from very I taking my you Sachs, have two Thank Goldman

cost continue? the second you of year? And worsening investment also in in cost control? the the results possible the with first question to the normalization seems based Is segments? Or of teleconference. with on terms will a question was continue is could tight retail, share right there continuously cost banking. control I cost That First management. is is operations control question. now, Will believe that my outlook us these This with that ECM to M&A business half It be of asset DCM, question. it wholesale, very respect ECM, was in have you toward in first quarter effective the control second pipeline your strong,

your for you Thank questions.

we JPYXXX we reduction. we remaining That achieved going undergone have is reducing one. have reduce anticipate acceleration of structure alignment the with of think declined. Because cost and normal. activities will levels is we these We business and our to XX% to cost would to means pandemic, to to costs I the recently, a Because other before in XX% is We like about even the by new things to of that sure don’t we before go make still situation economic not the of COVID-XX have that that back a regarding cost. after have normalization have achieved. the cost that that cost billion COVID which committed terms back of major in do cost in change number pandemic. First cost, and Perhaps,

So normal, there new manage will to adapt we cost. will tightly overall, control tightly. we I will to continue necessary cost investments. continue to But be And of course, think to

ECM, rates DCM the cash have to and is that needs your there hand. question, interest from a I low purpose. of there Regarding and impact acquisitions think pandemic pipeline. funding for on mergers on is be strong will customers need there and Worldwide second continue ample to the and our part And and are

then to in the announcement I raise with session, capital first income first mentioned As result a quarter fixed and nature. fund

continue. think I those activities will

that this. reorganization we see through and adapt stronger the than before, these we And actual in transformation acquisitions acquisitions, business reflects before. respects developments is or even believe are business mergers there and see M&A then appetite changes, as to to appetite mergers through in are I stronger economic dislocations economy Regarding and recently growth showing

M&A, of usual In XX% think the there these be have to continue Japan, don’t think and I fact, strong is which performance in that ECM, As don’t it I greater the of new years. about a not areas received DCM is view for think we M&A. normal, XX%, transient. matter I inquiries is needs regarding in strong will than transient.

much you for Thank those answers. very

is go Otsuka JPMorgan question Otsuka. Securities. of by Please Next ahead,

of Thank I have different me they that is But you. because one, Securities. JPMorgan topics. are on by Otsuka This two agreeable? Is questions. one let ask

ahead. go please Yes,

In Page a flash the was for reasons results the to First page, announcing the is are details. I sales more so Q-on-Q this of about learn that understand income – corona was quite but improvement on recovery, brokerages X. balance but Other security question strong. wanted QX, retail, robust. income there but is one reports, slump and in I were

So the can on this backdrop to you result? strong elaborate

you. that not elements but I’m Thank results. are speak in position peers, had about these there the to led to compounded some our

with their they which emails number effect. requirements. to our employees’ able skills are be but of we Of activity was was, our customers, back that all is have employees to sales being face a of to course, come did fair would making if has And as especially, are capture that not taken was the not market phone where high root, face QX positive is And The face of high, and them to the have probably market course, number converting activities, to have same we recovered in quite the constrained contacts. calls big things is because is peers. face meet a to improved virtual seeing so approach customers the there the with our our frequency the our to and original in it calls in number In and those players, so of quite of by Even monitored do element. level, non-face also XX% emails, retail. their also

a delivered security that’s companies. we realignment that year differentiation engaged also And we which in channel have has results. So last net one against

area the elevated. in comparison has the reached In the average of second So in level has expertise of been half corporate last owners number year each customers double. to new of

of pre-COVID-XX, such So the cultivate to able customers. comparison to been in double number we’ve

again improved. net the demand rate, number increase they is the high and interest services of So part their ensure that work how customers. stronger is also the the the of can And in low who skills people future the have increasing. And they on I of worth work, think of kind how midst need customers, our for our

But to terms so effect elements have different second of relatively quarter beginning together initiatives better have the of peers. our done So which come achieve the these be those in is to we still the far we’re than that may reform, midway probably deliver results, results. but

is Otsuka you speaking. This very much. Thank

wholesale same can you retail, the October, did in For speak but said to You about October? apply does retail. well

second is October Kitamura speaking. as was good This quarter. as

is Otsuka very you much. Thank speaking. This

this you commitment of what no question. Sorry on it is to ratio, second market And in but I in about fare and for the how asking the understand same that, do XX% one said, half. unit year. total your buyback. the the we But fiscal have can understand foresee think will payout we is

in half. So if a markets second there deterioration is in the the

confront may environment conducting an You where disabled you buyback. from are

while So rather the than in buyback, you done performance have waiting, if had been first was half. better it you good

seen to your fixed but So income of off, deliver you have not gains brokerages decline generation, of fare. continuity that of one in comparison will market say time you’re the say my you the income, franchise especially performance, doing regardless will in how the robustness U.S. current results is American the peers, Equity, it’s point the well.

year. consider spent and ahead, buyback it the you considering that months is in are you’re be to about share of because that So the one to ahead confident fiscal or years going correct time unit

do in your and Kitamura How sustainability gist of is should the How question. is think income? continue, speaking. This perceive second of I And perceive revenue our that the was half that market? assumption. we current we context, the momentum do that our the

we that and sustainable franchise and is, has retail customer the current the stronger to is deliver business the think of environment transformation results. begun market a have We gradually

performance. we basis, full a certain level able year be deliver to a on of we that will think So

share in This is is the Otsuka. judging Thank consider you. you prices Then buyback, performance correct? to that will from be

your responses. much again, Otsuka, correct. that’s Yes, Kitamura. thank for you is very This

please. is Nikko Mr. SMBC of Muraki, Securities. from question Mr. Next Muraki

questions. Thank you. have two I

commodities, you you future share is to in how the and that income. increased of peers because has income, analyze fixed but believe the the regarding supported commodities. there have strong And acquisitions trading situation of question The were peers do an expectation a the the not or First do I US US after fixed furthermore related raising fund year change outlook? result revenue because the in is indices. be next Amongst as of COVID-XX mergers of may in

you next year activities what terms do So income that your and in customer support fixed onward will expect business. of

question adequacy? second capital reduced about is Risk The adequacy. How capital has has improved. do ratio you and capital been view significantly

other the benefit these the deferred your to of the future On finalization these from that. definition view developments. the are your the Nomura these or because has and level? of the able Basel how current hand, changed? And adequacy capital you of may criteria, of Fed III in And changed introduction was criteria do be NSFR, review recent Has view

Thank for question. your you

slightly the to In was comparison In that about first decline revenues. I the were strong. in currency able areas quarter at FX, hand, very trading was bond relationship, was and in look think agency of Asian relations, government the on regard, to we generate rate fixed when direction dollar these were we very income. the In the down, because interest clear. mortgages First other

they businesses. not like where are various We have peers U.S.

interest the at for was, volatility outlook we As our were where able achieve business I areas is? your why environment strong. focused strong question We we going that’s rate what forward. volatilities, to come are we on believe And looking has down. results. How think that we believe I are are

bond in other because continue On our hand, be large fiscal expansion, many supply countries. will the high to government level of at

in government are and of bonds these. to some countries of expect level fact, of we Europe, many are activities And matter involved a certain As of in issuing we a continue. underwriting

the Muraki-san what to may but out, not from to is new – to index LIBOR there It to extent. a in full rates. change – clear support support index As me offer to is pointed may the transition a yet,

and offer although positive result that has Japan, but mentioned products the agency, that will are this strong strong as have for In year down, next customers quarter I this yield believe yield will for strong Asia had are at come – continue. for demand in customers very that we continue. mortgages. showing and looking in We yield environment that the world, As few looking agency we believe first we yield

has your come second question down substantially. to adequacy. It market turning capital regarding that Now seems

recovered Our Tier ratio well. have and ratio as significantly leverage X

in States are raised Regarding and the government in NSFR your before ways, you to X%. the final question. regarding ratio proposal the are that we to there And X% have institutions. have reduced the to United revisions that comparison some haircut in rule from was In bonds favorable financial

For U.S. treasury going factor. is trading, I to be positive a believe this

we to Regarding would And us to with maintaining of in continue to carefully, in United the forward this for watch the going by NSFR be expected. NSFR be Japan FSA. including to calculation, finalization States, going That is like similar Japanese understanding. is also positive. is my changes consultations Whether it will

Tier It for over level. an As recently. X is ample seems XX% it that ratio, it’s

factor XXXX seems is to we of and FRTB in you. sufficiently expected Thank major course level Of XX.X% But ample. have saying. been for a this current us as the be is

Thank answer. for you your

customers. ample excess of COVID-XX. with capital your of trends. a the you your have Stanley be result sufficiently adequacy, changed more might Regarding by purchase acquisitions, mergers own manager, these capital But some to the that and acquisitions the Morgan of level online respect recent is used Do or are what like as mergers asset expect broker to or appetite

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is we So answer be whether we question the appetite mergers M&A? But reckless of is, in and acquisitions. have yes. The if cannot for terms

you for Thank your answers.

Tsujino question UFJ Mitsubishi next be go of Morgan Stanley Mr. Tsujino, by please will Securities. The ahead.

Thank I much. you numbers. questions very on have three simple

all, United income. in States well in terms of of doing are First you the

do result. been you equity reduced few Secondly, minus, JPYXX.X that shareholders’ effective a level rate billion. as can regulations, the income negative the has – U.S. how So, billions, think you by number under AOCI tax do of a the think sustained? be on this But XXs increased tax has

second the third question. question FIC FIC. that’s my So – is on

You you us think further your share increasing, is up you bright increase able but be prospects, in this share to area? shared will with quite do that you’re –

Kitamura is speaking. This

is on put NOL – this of bonds, than in since carry income. it P&L, over United negative included the billion, States, to OCA the so other a End in that still plenty of we used was the First but United all our Mark-to-market remaining. JPYXXX from States. own that’s of years slightly own OCI March, the less comprehensive in proprietary we our our few bonds. ago of

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focused. As we very I area where already, compete said the is

kind number of but And do the Japanese we We’re for quite individual can advantages are to products strong individual to of JPYX,XXX selective, in one said, answer think we edge. access our income income another room trillion I placing depend, well U.S. think about increase assets to estimated would franchise what in question. If is market, speaking, are of we for U.S. some Frankly to focus, certain have is doing if so general there financial general, in in fixed financial that those not terms phases. phases, competitive some it’s is products But at I as we some are but difficult better? share, is it which of competitive we the in fixed assets. that look extent

still course, asset gradually strong from of the such as investments. issue, are foundation. be investment introducing but is to only are perspective overseas. an have on products for not Japanese products, products Asian and good still businesses well. investors a And focus Japanese capital And U.S. We beginning COVID-XX from but products such And destination management or may

can have funneled advantage So, competitive edge such risk in advantage. such are might Asia, and from be in perspective, so financial Asia. our many we a of institution we into the relative And we and Japan in take Americas, can

our upgraded. from So certain be still we share could for that products perspectives, you. such Thank believe

response. your for much very you Thank

Niwa Mr. please. Mr. Japan. have Citigroup, We Instructions] from Niwa, [Operator

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have I you. questions. two Thank

first is with us? acquire you difference management asset acquisitions? the management have adequacy you take stress financial the regarding mergers your under be scenario, to speaking, functions I internal you that the organic asset in financial have ratio believe growth. and authority estimates, business? included you on What that a estimate. on again? And would Under – level business, if major capital the you Bank. For capital Generally is the coming is that like scenario, to a globally the example, Mr. are as the included model. Nomura is through based Muraki risk as severe with adequacy some regarded of question view through between necessary what market by important. Japanese stress view there to regarding that Commercial related consolidations [ph] do sufficient capital so there under the M&A, well, on willing are adequacy is reports still up And And you challenge But and DoJ and is consider any in stress globally. regarding downside in could test share has second understand question that to – capital First, adequacy, test

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test. First, about the stress

disclosed disclosing Of is as is course, I X refrain that of scenarios, run I’m stress and Financial Officer. to over ratio Tier information. but we late, Chief from serving XX% would impact not publicly. like

stress bridge to will appetite. As quite say that, CFO to scenario I would have realistic our apply we a

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the lessons of the for have size acquisition, As M&A had we learned. a past in much the

As an of we do anticipate now, large not deal. extremely

consolidations and under business, industry, outside of aware way we are of management the asset Regarding well Japan, are within some as Japan, that. in there as

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things. thinking flexibly are about We these

response. Thank you for your

The by Securities. go ahead. of Jeffrey next is question Please [indiscernible]

If fixed-income minimize us the according overseas forecast intend they you you will are speaking. much. region? downside by the region? your very speak and point. for your name and ratio Japanese or seems negative all, first And than give of the strategy. about that at Japanese has global do Or according time wholesale global see wholesale new [indiscernible] the and been have First the In certain region, discovered, comment, is Global this cases Can one there to of for to financing what’s businesses PBT business. do question. basis, how terms not about the differences real you more the market do in Europe. is has think some And by comeback countries. of you the be Thank comments, the you such grow. This they PBT you my your you and or Markets I of That’s the of European businesses. risk regions resumption half. in but Japan, PBT will we to look but quarterly of growth to limited that this Can prospects region? is Japanese But revenue accounting Europe. Japan, of second have rebound the risk, normalized estate to with lag And economic more continue a by of and contribution think businesses, a secondly, in to downside

speaking. Kitamura is This

we all, for when slightly upon of transactions Europe. been is happened this a touched of had incurred. I past had even been on time In Europe. long losses If would this, expenses exclude profits, pertaining to that QX, legacy recorded First realization have This we Europe. a There ago. item I spoke in costs. of

second hypothetical, the very countries. and bad, also doing issuance Europe factor in quarter engaged supported it is the sovereigns, and this in of performance but another ECB’s was countries activity, was And but QX quarter Although was so various in QX so was much normalization. season. business the sovereign first in the was comparison not underwriting – to of London well, summer office were and our various they underwrote sovereign of vacation there

So in on this risk, context, REITs exists business. was that your but downside question in the

rather limited, impact be speaking. would frankly So the

said have the in in is business we credit shrinking. Europe As past,

described, chance half. fee you about about which So we’re frankly shall that risk. talked credit XX% particular of wave, But universe the in of the a pool, don’t is fee accounting downside about non-Japan If impact gigantic for we by How is breakdown On Japan but speaking, REITs credit, second much the U.S. between not may being second International. the accounted about market for pool. business, think think the point. your I I business, COVID-XX there versus

will the pipeline, [indiscernible] have franchise income, depending and ratio needing Japan naturally of certain of to within EU is to to many our the for have up indicator. ratio Nomura ECM be strongest we are on Japan percentage change. and of we of it So how ahead, needless needing don’t United any to going percentage go the where in that our don’t could regards that say, [indiscernible] in ratio have but the DCM We or account policy U.S. this States with

you how catch-up of pipeline increase? could other and But foresee market countries. other you the the activities. in of You in of number Do about activities that what level you think talked but Thank Japanese in think you regions? in do that comparison to Japan Kitamura. deals Mr. number the the Do the about will with the regions pipeline, deals

In This franchise Kitamura. have is strongest IB the Japan. in the business, we

at If go a it closely monitor by but XX% likelihood I up. Japan to see and there we on changes. XX% of we measurement, an could that So we depends look think the ratio the of increase the of the timing is enquiries M&A,

for much very you your answer. Thank

our schedule time It is end. almost to

will We question. one take last

please. We have Sasaki Mr. America. from Bank Sasaki, of

This Bank Thank Thank from for America. is you you. Sasaki my taking of question.

regulation It trend going firewall in a is is there Japan. that negative? that seems Regarding

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impact business advantageous franchise? impact; that on be not Japan is way Sasaki the banks. or you speaking. to develop If This have strong What discussion is will be in a there where the will

market for what is of your the much There that Convenience capital customer, for discussed. development firewall you on questions. should primarily newspaper days Thank of these regulation. report healthy are the be

of a the order growth including needed much and Center. development information corporate and the the market will is Tokyo there capital to market, Financial of the be good healthy further to For a customers that is grow talk be for is There capital handled. making in of discussed, for that is customers. way And but convenience Japanese

So done forward. be going discussion what is area to that much needs requires an

for your you response. Thank

accepted be by can Questions division now session. will Q&A closing remarks. be the concludes This IR Holdings. of Nomura There

in in In tailwind explained. This quarter, staying late the evening. there big until as the us for is first QX, the speaking. you Thank Kitamura with was we

as continue you is with us. and then even that franchise. able change. gradually and to our we but in but realignment strong monitor were But strong in to second results. transformation continue that will we we for changing were again hope which reform. Nomura truly affection Nomura. level a wholesale, could by about achieve even bringing cover wasn’t strong tailwind to to positive blessed This our So of not channel certain we is you in We quarter, debate is appreciate the and And retail tailwind, point not understood is that are stop. and our And the the you end Thank would over we continued joining will if continuing due the

you your conference for call. time taking today’s Thank your concedes that and

lines. now may you. disconnect Thank your You