Nomura Holdings Inc shares dropped more than 7% early on Thursday after Japan's biggest brokerage posted a sharp fall in quarterly net profit as worries about a global banking crisis roiled markets and hit its investment banking business.
Nomura on Wednesday reported a 76% fall in January-March net profit, joining Wall Street investment banks in reporting a slump in dealmaking fees as global mergers and acquisitions activity shrank to the lowest level in more than a decade in the last quarter.
Investors have grown more cautious about volatile markets as a banking crisis that began with the collapse of Silicon Valley Bank spread to Europe with the sale of Credit Suisse Group AG (CSGN.S) to its Swiss rival UBS Group AG (UBSG.S).
Moody's Japan senior analyst Tomoya Suzuki also blamed rapidly rising interest rates around the world and geopolitical tensions for dampened investor sentiment.
"Moody’s has a negative outlook on Nomura Holdings’ rating, reflecting structural challenges to the company's profitability in the domestic retail segment," Suzuki wrong in a report.
Nomura's wholesale division, which houses its investment banking and trading businesses, sank into the red for the second consecutive quarter with a pre-tax loss of 14.2 billion yen ($106.24 million). Costs also ballooned at the division due to global inflation and a weaker yen.
Its shares were down 7.5% in early trade, marking the biggest daily fall since March 2021.