Nomura (NMR) 3 Nov 222023 Q2 Earnings call transcript

Good day, everyone, and welcome to today's Nomura Holdings Second Quarter Operating Results for Fiscal Year Ending March 2023 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 results, which involve known and unknown risks, delays, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievement of the company to be materially different from the results, performance or other expectations implied by those projections. security and secondary political volatility of markets, rates, exchange economic sentiment, and of transactions. include and currency of conditions liquidity level rates, factors market and events conditions, investor interest size, Such number competitive timing valuations, and the With like would we begin the that, conference. to Mr. Financial Takumi Kitamura, Chief Officer. Please go ahead.

to fiscal overview XXXX, Takumi and declined results Please down before financial billion, six a to for the second XX% income was quarter X. is Kitamura, Holdings. decline Consolidated Operations. This our turn to billion, of evening. income Results JPYXX.X was Nomura XX% Page March JPYXX.X now the billion. of I'll half compared Net revenue year JPYXXX Income taxes of document months titled to the for first of Good using CFO give last year-on-year. ending X% Net you an of September year. the

last stocks of market conditions negatively and revenues on investment investment included shareholdings to an worse retail impacted contributions of year due investee period and income revenue billion. rate six due among As as IPO slow monetary of three Japan of the concerns management by Investment also taxes rapidly due interest widening segments right, tightening the gain clients U.S. the and worsened Sentiment the sales trusts flow during between income was to significantly. a from continued to and JPYXX.X shown meant of bottom and company. dropped loss months yen recession. mark-to-market uncertainty an depreciated the before same was differential valuations the on and period Market because

year. period results compared As a result, divisions both to the same lower last reported

back The and U.S. the client term. progress also of Fixed divisions, assets Investment first was income related stronger we performance concludes Management to efforts flows both to decline reported and year-on-year. performance. the the revenue revenue headwinds, unrealized of heightened securities products. That driven last Wholesale the are in six rebounded FX Segment Despite absence interest volatility, in losses billion long However, last booked transactions year of rate macro medium our JPYX from unchanged due grew first of retail was with increase in on for An to recurring resulting during months. market in a business both seeing growth revenue year. to the roughly held by loss operating our contributed the results. share to other overview of prices improved half client purposes. over

dividend shareholder a JPYX the returns, per year of shareholders record of share announced September. we of half end for terms of In of as

taxes Please and Let's income improvements performance from in to last now JPYXX.X second before quarter. I billion, take All here up are JPYXX.X JPYXXX both net look X%. at quarter. percentage Income quarter-on-quarter. X. income was Net turn the comparisons was revenue a Page billion, billion, mentioned was representing

of XX% the represents While impact, this management, income billion, businesses, improved. an is taxes, loss as our segment an ROE gain was investment X.X%. core was EPS increase income before Three satisfactory. and performance JPYX.XX far from market which was JPYXX.X uncertainty investment had

grew a take income performance. Page business revenue to JPYXX.X X% Net at look now Let's income for billion, X second Please retail. turn before to increased taxes billion. to quarter while JPYX.X XX%

discretionary stocks. flat trusts cost Flow time Disciplined inflows and slowdown billion. revenue uncertainty coverage ratio impacted JPYXX.X driven of in by up recurring was sentiment at was it investments investment on loans. sales XX%, and cost revenue control billion, XX%. marking recurring of investor revenue above a the shown leading foreign JPYXX.X was Market first assets to X% ongoing left, bottom in a resulted on recurring revenue As the net of

driven XX%, quarter included Total is asset in making by Page are the grew in estate slipped sales by JPYX.X sales advisory insurance, and consulting. in product. real Consulting related which we revenue, to flow trillion. X% However, X by progress services. revenue, shows

across the funds July, declined saw of the while trust, spreading in investment global due And donation XX% sentiment. For scheme of sales Japan. also weaker Sustainable Select inflows, ESG total Nomura equity investor investment support gained fund, trusts to launched

On bearish. shown September stocks stocks KPIs. hand, but as and on market on X%. of grew turn rebound an the stocks of XX% were over of sales August by recurring billion. and X foreign as revenue inflows Primary sales top of left virtually buying back in increased assets our the red, turned Page shown of JPYXXX.X the to domestic transactions other in slowed, by Please the non-existent in update opportunity market Net for of sales

Partners was on last was JPYXX.X billion. for also past negative taxes revenue resulting in revenue ESOP booking inflows significant our see asset salaried September improved was of increasing business overview two solid, steady impact in the income KPI. related particular, employees ACI performance of can we Investment an to fourth and loss right, businesses recurring Business the systems. income as gain and of resilient Advisory fees recurring proposals both provide for quarters, increased management the had quarter. to a of various Participant management million, transferred are turn billion, make you quarterly to the the as The at ESOPs Investment billion, and cases the actually given remained had has investment into assets increased out we quarter. which Investment services JPYXX.X narrowed Trust similar Net JPYX.X and are in and reputation after both billion representing on the on the loss, before The X.XX good companies improving and growing, JPYXX.X numbers trillion, towards X of to JPYX.X us, seeing and end progress information. number being top revenue of average at right Please over bottoming revenue to is to Page unrealized gain management. improved. also the shows services stable but from bottom asset last dropped remained Capital loss investee Nomura As quarter.

to from calculations. This quarter, around there timing Please was issues the due XX. turn no of Page fees to performance contribution

trillion. and DC internationally shows shown and we the assets also of July also The Core down end due JPYXXX shown purchases inflows June left, in at JPYXXX the REIT billion, into these make from business on used channel to inflows for inflows. reported -- inflows trillion, factors. unlisted of by were end reported to Average through to their market funds. billion September at September funds likely the MRFs, Trust due park business. where As ongoing inflows individuals trust In offered remained higher billion new the billion Net to correction. market JPYXX.X Nomura publicly booked Securities management during on for investing left of the mainly funds, bank as inflows JPYXXX The U.S. into fund under the JPYXX.X investment ESG and outflows equity was posted alternatives Investment booked funds JPYXXX idle the we channel top AUM JPYXX of while Advisory fund. was the Japan, bottom of billion. Investment from

in business depreciation good performance bottom increased the quarter had Investment floor costs our were trillion Page improved JPYXXX.X products. an JPYX.X assets billion, the to X% to yen able shown commissions JPYXXX.X overview The performance As progress by we and right, wholesale exceeded various to making XX Banking while yen expenses to of to are and Net also led brokerages. variable on billion. turn weaker pay as an markets. higher the Fixed and a in under contributed. for overall. Expenses driven sharp development revenue contain increase as of and we for income such Please and such performance. expenses, push bonuses macro management into private increased alternative

As declined XX% a JPYXX.X taxes result, income billion. before to income

on while Investment roughly Global on quarter quarterly the turn strongest the left market to Now please net Please results revenues revenue multiple Banking. such revenue Page billion. Page good JPYXXX.X revenue worked another billion. increased issuances. the remained last executed to quarter Products Net unchanged to placement with Demand revenues quarter rates advisory market away for from private fundraising business, and saw billion. by Sustainability of X.X the Energy X% services billion, and GRIDSERVE multiple current and revenues slowed net top Securitized revenue in JPYXXX.X revenue years. rise, contributed declined. Products JPYXX.X execution sluggish JPYXX the stronger as related Equities flat Sustainable its to solid. but solutions cross-border right-hand to remained as Products, side. net Credit transactions, line. volatile XX% at Products for AEJ amid business Equity and overview FX uncertainty. XX sustainability Fixed is emerging shown an from as ongoing Macro related bond We slowdown income while slow AEJ. line a transactions delivered Japan, XX at on last shied EMEA which as slight was in posting such DCM volumes reflecting we were of increased FX Spread to as with had equities, slightly Markets turn ECM corporate for in delivered conditions. was for IPOs, in and

position. you expenses other legal up XX XX% JPYXXX.X at to of on Overall lower Page expenses non-interest to while our billion. by turn let's to overview yen declined an Groupwide Page were financial Now flat depreciation, were XX. roughly gives costs due due expenses expenses.

weaker on our trillion, Tier trillion. of by from billion bottom adjustment June left, by JPYX.X end mainly an JPYXXX FX in driven the X translation to shown billion the of from of assets was As to increase the increase JPYXX increased over the capital June due end JPYXX.X Risk-weighted yen. an

bottom increased waterfall you to the graph mostly in risk see As by yen right, credit JPYXXX due depreciation. billion, the on can

concludes Tier ratio was of with of our last XX%, both our results. was result, ratio second XX.X%, September of a overview as quarter. As capital today's CETX the That quarter and in our X end line

Retail our and uncertainty. was challenging given the the revenues Head cost at quarter with each as a sponsored as program start, market the of to structure. by improve of started the said businesses initiatives. their I But revise Retail CFO steadily is strategic moving myself, forward has and This

rebound gained have project. and this aim full understanding revenues performance. The the numbers see boost detailed an for through of market yet each for remained segment the and We October, to to in through areas are uncertainty reductions. a we cost strategy and We identified

from and businesses However, environment, faced made Products businesses and our bonds that successful were Income Advisory -- channel revenue marketing our but In is Wholesale, Solutions delivering USD taps and able value growth in strong diversification. growth sales movements. Banking into overall, in benefit transactions terms market our to and Investment of contributions. we And Macro portfolio a financing retail challenging Fixed product through of and

generally and investors by We into our rate interest hikes and from so volatility as was in we FX, November, around strengthening events, prior several both In a U.S. increased volatility midterm the opportunities and U.S. rate also have institutional trading and meeting, election investors from foreign in revenue we FOMC returns. slow. But of bonds yen year. including and see dollar, pause ahead sales investments bonds the Japanese a tapped to we October, saw international business

While liquidity uncertainty providing while expected to now, the to Thank to risks clients. we for continue will market very your continued our is and much continue support. for solutions you stringently manage

have Nikko Securities, Muraki-san, is go question-and-answer first SMBC The our Now session. Instructions] ahead. please from we [Operator question Muraki-san.

Muraki Two please. is This you. Thank Nikko. questions, SMBC from

with final at even Q-on-Q more. exact In that don't point. profitability? My considering I but made Could about loss, Americas wholesale is increased please? amount, cost about JPYX.X so. future? Page say briefly, upon the possible, think JPYX the the on And let's the the somewhat billion the Page overlaps is, it but marked do you second XX, business my there's you the that SEC extent the And profitability, XX, comment, plan pretax any this decisions both but the Americas, how the you've or But billion, Revenue expenses. down. on or control in JPYXX.X how billion. question you know to increased wholesale the and moment? making First, your penalty, first that's to time, cost this decisions ACI cost, share this and in you're Y-o-Y, Any touched

market-related I not were JPYXX So there it U.S., the is is environment still mainly the of operations, And which these bad, loss. about that wasn't even if earnings if losses, there think. were -- billion for

But business this? and the U.S. So this see operations, reviewing the you share What heavy. okay the group? are viewing today? Thank U.S. to factors the loss-making capital were How in is, as how perspective my keep behind you about are you quite trend capital from U.S. business Is the do thoughts, of efficiency -- CFO, this? are current plan I how think do for what reason is your capital overall as you operating are So -- and their is your thinking you you U.S.? you And do peers a the the point you. please? could fundamentally how it

Kitamura. Thank is you, This Muraki-san.

Your first wholesale question about expenses.

been As cost inflation also was is In we income wages out, much ratio and and and market, high. in of cost XX%, QX. factor, slightly we outside And somewhat were dragged do to And QX pretty of with why And an would we but markdowns. inevitable, pointed the due ratio the have the Japan, the we rise higher. is if extraordinary the this work line to to continue fixed the is some you exclude cost that income by was lowering which also the had in that, will expenses. in was on reason QX, there somewhat

However, that XX% is either. not low

And we related this market. businesses lower of the in the And strong half, need businesses top work grow continue and and in lower the to finance So that not line. quarter the very in to especially advisory will costs. ratio, sluggishness in the this strong, and income we the because were to the the order first to cost ratio

So expenses, the once the will revenue we product carefully the wholesale to and assessing and that cost lead beginning to picks have the of expect amount in the income we there's Meanwhile, is costs seeing have we growth the of been project each year, the the improve, been ratio. expenses. there And working base or on redundant that terms from the potential. and where where up, lowering of

we With it's And we opportunities, Chris well. in with the growth the new terms seek Chris to head, and infrastructure are important such of Wilcox, because need And have supports and business business we which to as we communicating very closely growth. to of in invest support that. productivity. remotely our been working improve have to But also platform, control the COVID, looking opportunities,

now So past. in improvement, the know than productivity room we where for we there better did is

business will Sorry answer, our on lower line and but the making for we operations focus top from we sides. productive, to growing long the the seek more both will expenses and

out, about the was And the As ACI in well. Your JPYXX about how the it? the we billion second than question was you quarter, and Americas this markdown think loss. there profitability and and as there point more penalty of

rates And but business, so well, the very slow. U.S. issuance, in rate by this in and very products interest products, environment was do impacted quarter, the which tough, rates to business agency mortgage slow. was And primary very the was as for the continue

core business, is out. global our which and banking, As suffered deals, who peers, the investment pointed a was headwinds you decline engaged as M&A our affected, result, agency well there, but as by the in are a as earlier, mentioned business, And market we, advisory business in faced And there loan down well, as as we inventory in we U.S. are the I in the of were that was markdown the be expand difficult. And number turned factors products. dragged we to opportunities. and trying to

with which were which tough, terms our first Americas a have business of markets, And there we good multiple as of we So was multiple main you products wholesale pointed business, in in somewhat in position. factors, affected global this are line but very out. half,

the and And people. all products, diverse and to largest cannot serious of good tough, demand becoming But are the the And long-term, Nomura we the IB and these And cover all to sustainability. area about quite mid these at And a we opportunities is in franchise don't the to the related of but Americas difficulties. continue we the in comes is QX, moment, have IB, securitized example, it will products in more quite robust, facing course, expand sectors, For as was were But exist any some sustainability aware. equity much U.S. the IB concerns when continue that in businesses. fee we are you things to yes, are in businesses. position very derivatives, in

So we call are we up, Infrastructure, we this Greentech choosing And area. up all efforts. have make our And monetize we focus we briefly in in newly in cover where sure GII which team in commented we put cannot advisory set placements. will industries, the this are GII. about the so we capture areas presentation my And business, private I opportunities to Industrial the set and having

We And in are the years bad in the well. the And hasn't Thank seeking over tough, but that don't past U.S. doing potential to at think. yes, the moment, overly the a we this have as performance been you. to are are I that things bit be pessimistic, area. We few expand buyers

Thank Muraki again. you. is This

capital business and allocated So geography each have each at and product, moment, that there's in the a each you to product.

feel the and is, are with the the And the low this balance in in you is review capital first comfortable it? market ROE the quite you're environment, you that so half. and you await was to do major current to of a how to have don't improvement about think going But

I sufficient just that This And to Well, not we're is going the is Kitamura. not think. for management, wait.

So that businesses. current to our expansion competitiveness forming environment, the mid the well as to always withdraw our because and in businesses And long-term may work way. just outlook. are reviewing lowering the we from this isn't levels we cost businesses of will choose as some our And or improving on certain we stop of

Understood. Thank you much. very

please. of Mr. question Mr. Securities. BoA is Sasaki Sasaki, The next from

you. America. Thank two I Bank of Sasaki questions. am have from I

for second the coming have given being, of said and quarters, But But question, do we at liked, to expect you But can believe. the situation much but start a seems second businesses how for toward not question, situation, or assets would time markets. difficult Isn't thinking bottom secure to the you this What are overseas. questions. you strong actions? of actions That's you it this are we question. performance related But to be year, overseas. investment seriously satisfied not level high time or as risk two we change. it's the first the to to cost the talk and as that appetite cost sold I overseas for overseas? about first And closer line. First the room is with is a your there opportunity looking certain question taking this the in my There the order your in is view or But being are Those with are end my fine large-size regarding is investment year. what be is to situation? some some previous

or very for be Because much Thank be sharply if overly speaking. mentioned, improves, as we we Kitamura This outlook. rightly cannot my you count environment of is that. about greatly I optimistic market position, cannot your but on But you question. very delighted, will

a So we would like shrinking business. keep to where situation we our avoid

like the secure necessary investment would cost we structure. to appropriate and revenue make So

So we will actions. cost some on working in that viewpoint, be

head in myself started division. as Retail and Retail projects Firstly, division joint sponsors.

identified For various were expense. also, also and And work to we strengthening each systems control for HR and personnel various review, actions and been streams the we example, suppressing hiring and are area, revisiting launched. that IT and domain there MIS, new are And SG&A division. each Retail also for have for strategy are

is on or have might of actions. comes now. review So naturally, before, IT quite we mentioned we systems but the those or a unavoidable. applications cost this applications, also have of when right And existing it I working number to few system are radical

be the systems we necessary some system could users have they Of have limited for number -- or applications, but necessary are of given them applications. of nice infrastructures, to course, some

just systems. Retail, IT regarding systems some So this not to and Cost what we revisit stakeholders IT control to applications, but is urging is proactively. limited I am do globally, can the

like would we So necessary. what's to do

investments. on question, Regarding our your second view overseas

being reports an option taking that's approach. But generally speaking, always Looking But assets we about sold. or some businesses there random media are through for share at media increased coverage, are us. M&A, not

in do introduced. synergy us to gives are a that access are products from there something know-hows or at we or that III point, to such this can investment. there expect are But finalized taken investments. the version something that in specific Also, have not we target making Japan, will if isn't XXXX, Basel for clients, So opportunities, be we open

investment. investment. balance view good like with area case that as in first that, terms to will of we environment, a not area finance was But of any investing is and So it mentioned In challenged the -- potential be a itself in IB, Investment we'd we not evaluated have of Banking Greentech for the transaction. private but its or The thinking keep to half, but operating successful successful Greentech, of areas activities. a do between is acquisition consideration the

inorganic So could possible. different forms of growth be

digital or my sectors, may answer. That concludes that in. core we For example, some sectors those be be might other sectors interested

very you Thank for much your answer. for Mr. Kitamura

The please Securities, go question Niwa-san. from next ahead. Niwa-san, is Citigroup

this Niwa to This and you. please. from far. question questions with ROE, overlaps Yes. you. Thank a And so is Citi. made Thank ROE the related

you more it's and them become pillars to in dependent sticky you the not you revenue net share to think. when are or but you in haven't future. businesses your they a achieved you and the issue the revenue you than I'm interested in revenue a And have me. still issue please of to also future. it's there in have on activity, and that could that they not And you the wanted any grow market to but think businesses, your the than asset more the is, like my look expect that and midterm, I with say the origination market, flashy, be could if may client opportunities I drivers inflow, question finance, Greentech, Other up business rather I yet, cost results are become ROE. structured at the them in management, you -- want want the and of

may that. like opportunities some And if have So I have questions. any that, please you follow-up mention

is to you well. it This say, X.X%. expenses. taking as revenue as issue ROE, working action on lower as you. our the we Kitamura. is said, and proactive a time definitely are And I reduction this cost And Thank we are Yes.

Management So we to still us. yeah, how it's also I been Nomura And but venture. also results haven't sticky. on grow the with you it to important. investment and a Green the businesses in management, working numbers, That theme the long Japanese is depends define is asset to business the the that business, Nomura would over like or like Trust guess go But big you're Green income in over efforts how is to that question stays lowering government policy businesses the used positive we which And growing its Real management of the doesn't the we will for try real definitely to the in that referring our as Estate sense, these able joint the we revenues. Fund, say, And example, QX, And And and has like the for investment asset focus asset-based money up DC have in investment support Fund, the is key balanced word government terms we from moment, achieve would the is lot the many the long-term. future. trust Investment setting and away. in a there's business. about to main but growing recently, core but ready income that in et quite announced have. as our and these products term And on we In the JPYXXX mid But that's Meanwhile, are was income, you grow into ESG channel. channel Nomura Niwa-san, continue more expenses, And grow revenue are seeing other the inflow sense, that's and to is like sticky, channel, type a very we important of also the is And double growing. that going perception we I was to core bank the for expansion channel. or the Asset SDGs, area the steady linked that into business, Select inflow business follow the of in an channel, would that there funds, for bank's do are Sustainable billion Nomura channel and -- up of is like of initiative. through in are securities Nomura's -- people or Trust. And for to was banks, the cetera, us. Investment Securities the the earlier, at DC and products past, and on the ones bank channel, to -- mentioned the that themed the flowing And like those we businesses. popular, That

business. So that's one have has major this we us. up steadily theme exposure. to Wholesale, at And and starting quite that for is a been the And moment, business in Infrastructure grow want Finance nicely, we don't that much

growing. which pretty the worth years much of certainly we been we for high has International been the leader several ago, has changed have as And AUC, assets to the number cumulative process growing hiring And of grow So steadily completed and accounts the want business. RMs yes, net Wealth custody, Management, under we this the and well.

we which future. have intend the in we here. another is grow area to now think This I XXX

So I these are the as don't but the know we question properly, businesses, answered if Thank position your growth you. I which drivers.

meet Yes. From to do it? is And terms XXXX, But that intend are be midterm the unchanged? quite dependent terms in you the is to you may. target believe, an question, any have your is to going target. are if rate XX%, target. a X% that to you In I of this aspirations, additional this in And market. still ROE, different review on going to keep And or of run perspective, you I -- ROE plans do

the a are there And times and like seem. quite tough, and things neither situation, is ambitious Yes. the X% as tough very current are is that This would may times target yes, the which moment forever. level the we to But actually. to is environment, based maybe, But current firm. Kitamura. continue this XX% to At quite last on with good and bad

do and to just X% to seek we Thank we you. have XXXX. have So to target to XX% in do the achieve what

detail. Thanks the Understood. for

The of Mr. question Watanabe-san, please. is Securities. Watanabe next Daiwa from

Daiwa. Thank This I from Watanabe you. is two questions. have

is JPYX? first XX% adjustments The ratio. reason midterm kind is offered bond retail regarding for a products -- the dividend. stance So the on The dividend investors, what second what's The selling revenue? to privately is retail the did and is make? question question But wholesale of of you regarding JPYX, what dividend what is the And the for as your revenue well? for structured privately contribution also offered product, payout

for Thank question. you your

Kitamura. is this -- Firstly

we are the are expectations what dividend, to. paying close shareholders' Regarding attention

So one-off what of we half ensure. payout to first factors. stable this seriously we some is had the year, dividend want In

example, imposed first year. of the this in authorities, by that's For penalties half booked U.S. the

So the bottom line adjustment happened.

of upon pool to bottom per XX% payout a the adjustment As -- ratio, return share. adjusted result came pool that, of upon JPYX for total so payout that, based based so line, to for the we

been next, contribution this structured At right now. bonds. has bond from So offered sale suspended moment, revenue publicly

As for continuing privately with offered products, we are sales.

X% the categorize is For retail division, are and we offered as the of offered, the of Out offered first a what publicly bonds In define or contribution. of breakdown privately that offered the bit and the from and offered above a how ratio at -- But privately it's products, offered total structured half, in products. X.X%; publicly XX% between those products. publicly privately percentage revenue.

cater so are you products, offered clients. professional, So that needs they the are tailor-made for to privately products you of to know

-- position products. our for investment is to offer we privately clients, So from offered whenever have we needs

revenue considering contribution On that guideline products, Japan I Dealers on Securities of structured as revision In only to offered is context, hand, bonds. for sales. our publicly But Association we the is suspended X.X%. mentioned, have the other

revenue you. on That's my impact Thank the answer. minimum. So is

answer. your for much very you Thank

contribution FICC to size of of what's the Regarding contribution? global Wholesale, the or markets,

Thank speaking. you. This Kitamura is

business big. fixed Our very is income

it's So than half, mostly the wholesale, and less it's to revenue structured bonds in offered privately contribution X% first products.

So that's the how small is. contribution

denominator, The or fixed it is not?

No, the is denominator a whole. revenue wholesale as

Okay. much answer. your very Kitamura Thank for you Mr.

is [Operator Securities, go Instructions] The Morgan UFJ ahead. please Stanley Tsujino-san. Tsujino-san, Mitsubishi next question from

time, At This two this is you. Thank things. Tsujino.

it every of of business JPYX.X time here for And time? billion this, not? Other, one-off breakdown corporate or First, a onetime under And than segments is in the about is And billion. is, the talk the there's items, -- we JPYXX.X segment -- it included there's but or the item this other is just negative. just which is the what this remainder

in big treasury Tsujino-san. of a financial the very and and charging gap Very also Yes, also And in short-term division, was a there businesses question. QX, was rates is there's process. billion in was difference our you, or this related that the of Treasury (ph) U.S. arises the JPYX.X there the there the Thank currency some CVDVA a -- time. which quite And lot managerial fluctuated I in technical negative. each gap -- is accounting. and oversee of And a there that And volatility. the

really issues So I helps your understanding. which actually, technical QX. caused that -- if But are so these number don't know this in

when case, this keep the that's if rules this and But items, have these actual understand numbers, shouldn't aside, you and allocation I the expense the there's of internal these JPYX.X economic I is it difference, and this loss? you look Okay. think. we it understand. And -- an billion, have leave we I or at various valuation actual

billion or technical based So a this just didn't it's JPYX.X on understand how I significant if really is thing? And explanation. your was wondering I

you. valuation Well, rate And which this. bond and This for that's reason a Thank there for issuance, the fluctuation, swap which led interest was this is main the Yes. to number. moves, sharp Kitamura.

doesn't usually, really happen. So this

very it. not of was expect current the so in is how technical movement which the a number And we this do market, kind in exceptional item. to should extraordinary you QX, this it in or led understand quarter, And

you. Okay. Thank Understood.

and The that problem background. been investors expected choose if pointing returns that, with fund FSA has products, fees. is clear. other the a out question And is pointing quite and fee for is for the And the FSA considering the out wrap the fees wrap, the high, that fund low-risk bit wrap is fund

terms clients, want buy these So really a low-risk don't really I wrap in they products, through to of Nomura's fund think.

exposure And have still FSA's nature do So there wraps cases any to fund that fund -- wrap. type fund that or definition? of you lot have the there of according spread balance wraps, have? of you negative how that to of wraps risk? may take is you the fund any not Are kind a But many which And that. do you

you. Thank Yes.

wrap Well, of wrap with question, changes clients risk media following is types it. these and same, where aggressive which the the but your and balanced a -- on have of not have fund to trust selecting inferior understand relatively the more cost compare time. And part are coverage interest terms In spreads. there been And I as as cases the the I of the the fund high is than And to in are for I this wraps Nomura's if -- they products investment negative hand, other some of well. fund time risk, believe, we same percentage almost products, different versus the performance the is style, are type fund, weaker a is Nomura's from fund. balanced

lot those quite bonds. fees hard are products, low-risk are the products. it's include And there with current lowering environment, of So say. our interest we to rate which Japan And low a for some temporarily

So in Nomura's of we the and mix behalf. conservative fund majority our the -- relatively the products. up of percentage, the and are contributing we fund to improving you. the wrap And client's are Thank on have performance wrap terms conservative

this -- And plus gain the the future for have Okay. was billion this exclude here? think have investment one-off just the I if that you quite implications time. was have alpha it factor JPYX.X but number was will the Thank a valuation you plus has in positive positive positive if changed? securities? gain, the And -- you for lastly, alpha, even we the large quarter? What And of What you. or

check. to Tsujino-san, sorry, just

you securities? about? What about? are talking P&L the you Which are You're investment talking not talking about

equity I'm investment, private operating -- the talking securities actually about sorry. for the investment purposes or held

in This that's and banking there former improvement past Okay, COVID have. investments earnings valuation with this the But is business why and years. and I a the see. gain. the booked Yes. coming we over were was few an under improving, is merchant the the tough things control bit are And we valuations. COVID-XX, And

Okay.

is all this the company almost from gains valuations of mainly So the the the I valuation it's gain? the investments? And mentioned, from of aside

there positions but actually, have valuation which exited, it has are Well, yes. we from gains, some also

much. you Okay. Understood. very Thank

is Ban, of Ban please. question Mr. next Jefferies. from The Mr.

Thank Ban. is you very much. This

have I questions. two expense, Regarding

ratio. expense personnel Firstly,

explanation, mentioned company-wide or your even revenue the high. comment of ratio XX%. income to your But ratio, second it's you that like but is on cost to based QX when overall related upon the make? My there you expense explanation, But according you in based and to to So expense your seasonality my was ratio, environment expense achieve? also personnel change generating XX% there is that question much, question not the target ratio personnel the Any can would in does on explanation. terms is,

moving as result going come stands are costs absolute of you as on forward the applications, of So system conduct But amount, not some may as a to to comment system they or much system telecommunication and you IT review the But it accelerated for to it increase have seems to a be you actions them. have, well. that and an somewhat radical from take? down where the is may going IT cost Could expense.

Thank much. Kitamura you very speaking. This is

basically, us personnel lavishly then is expense, personnel it expense. go for of course, when will only be at as Regarding whole, this but are to a to number, revenue us, for the not number pay personnel tends determined. individuals total performance personnel then ratio weak, does if level our and industry go expense looking Not But up. of compensation up difficult of expense the

and view and example, pretty our So performance market is is the right an something our sense, In for we as focusing are Last boosted. performance area. peers that now, important was the banking was factor investment we what of is an also situation year, factor. that good, important on

year, bankers impression. has cost hire to So Compared that's my with the last come down.

personnel down, do ratio personnel target revenue goes are activity. we But that's we expense not PE, but whether tightly target because clear up, an -- So control ratio personnel comes as company, expense a we a the of when have important to going expense, that have ratio. the

cost, review. Regarding second IT question the I your used radical word regarding

So be radical Temporarily, radical review? review, but do some when incurred. costs we may

will accounting from deposition on down. incur. some come example, costs perspective, But depreciation may after loss For that,

without So infrastructure cost be investment necessary we because won't But lowered. be to able business. mentioned, a will solid our done I infrastructure, as need we solid because be will support

have will to a on as we infrastructure, costs. And good to won't depend we without reduce be So able manpower. result,

So right Thank controlling extent. information personnel will controlled telecommunication my a at And will That same concludes time, is costs we expense, that approach. the and the believe to certain be be I answer. you.

answer. your for Thank you Mr. Kitamura

like finish, would It's to question-answer conclude we and session. time to

address department. Nomura ask IR Holdings. by you our If have questions, end, more In please we like to the would closing Nomura make Holdings some

are face I top and and address these absolutely terms the also for currently This them. are the senior think future. issues. quarter, we initiatives management, is working your everyone, on And questions for in you, And in is aware the the issues, various are will Thank this There necessary and of several you. expenses we Thank -- and of on we line side, today. Kitamura. challenges will we, this

realized and to with would will that. or early already still as and reforms, as and how continue of actualized. efforts act and some some results, not midst leading meanwhile make like every our show changed And speed, right are we are and do show we the and to to But bearing possible results we you the fruit we in are effort have

forward look your Thank continued we joining for to very support. you So today. much

Thank concludes you for call. taking that conference today's your time, and

You lines. may disconnect your now