Nomura Q1 net profit slumps 96.5% on market headwinds

TOKYO :Nomura Holdings Inc, Japan's biggest brokerage and investment bank, on Wednesday reported a 96.5 per cent drop in first-quarter net profit as volatile financial markets battered its investment banking and asset management businesses.

April-June profit came in at 1.696 billion yen ($12.73 million) versus 48.5 billion yen a year earlier. The result compared with a 22.59 billion yen average of two analyst estimates compiled by Refinitiv.

Investment banking revenue fell 33 per cent as aggressive U.S. Federal Reserve interest rate rises and geopolitical tension rattled global financial markets and turned businesses cautious about stock and debt offerings.

Companies' reduced appetite for deals hit merger-and-acquisition advisory revenue, which had been a growth driver for investment banking since Nomura bought Greentech, an M&A adviser in clean technology, in 2020.

One bright spot was fixed-income trading, which benefited from higher volume as market volatility led investors to rebalance their portfolios.

As fears of slowing global economic growth sent financial markets into a tailspin, Nomura's retail and asset management businesses also sagged.

Its investment management business logged a 11.7 billion yen loss, while profit for its retail business dropped 74 per cent from the third-quarter.

Nomura is aiming to change its earnings structure to be less vulnerable to market swings, by increasing fees for managing clients' assets rather than relying on stock brokerage commissions.

($1 = 133.1900 yen)