The biggest brokerage and investment bank in Japan, Nomura Holdings, has reported its third quarter results for its 2019 fiscal year ending March 31, 2019. The firm has yet again reported a quarterly loss, marking the second in a row, due to a large write-off in its wholesale segment.
Overall, Nomura reported a net income loss of ¥95.3 billion ($876.64 million). This is a notable drop, considering the same quarter in 2017 had a profit of ¥88 billion. It’s also below market expectations, as analysts surveyed by Reuters expected an average profit estimate of ¥30.9 billion.
Net revenue for the company was ¥260.6 billion in the third quarter of its 2019 fiscal year. This is 8 percent less than the second quarter, which had a net revenue of ¥282.9 billion. This latest figure is also a significant drop of 36 percent when measured against the third quarter of the previous year, which had a net revenue of ¥406.6 billion.
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Wholesale division drags down earnings for Nomura
Taking a look at the firm’s wholesale division, which includes Nomura’s brokerage and investment bank, the unit posted the second biggest loss for the company, both on a quarterly and yearly comparison, behind its asset management division.
For the third quarter, net revenue was ¥128.2 billion. This is down by 13 percent when measured against the previous quarter and 23 percent less year-on-year. For the nine months ended December 31, 2018, net revenue for the division was ¥413.1 billion. This figure is again down on a yearly comparison by 18 percent.
During the third quarter, Nomura experienced a robust performance in equities in its wholesale division. However, this was offset by a lackluster performance in fixed income in Japan, the Americas, and the AEJ (Asia excluding Japan) region. This was largely due to market uncertainties and credit spread widening.
The loss before income taxes in the wholesale division was driven by a substantial increase in expenses for the unit, which was thanks to a goodwill impairment charge of ¥81 billion. This brought the loss before income taxes to ¥95.9 in the third quarter.