Nomura Sees First Full-Year Net Loss in a Decade for 2019

The troubles for Nomura Holdings, Inc. continue, as the firm has published its financial results for its full year and fourth quarter ended March 31, 2019, revealing the first full-year net loss the company has reported in more than a decade.

On Thursday the brokerage house announced that it had a consolidated net loss of ¥100.4 billion, down from the previous year’s profit of ¥219.3 billion.

Net income for Nomura also ended up being a net loss for the Japanese firm of ¥37.7 billion. This is significantly lower than the ¥328.2 billion net profit the company achieved in its 2018 fiscal year.

Total revenues came in at ¥1.84 trillion for the 2019 fiscal year. When measured against the previous fiscal year, which had total revenue of ¥1.97 trillion, it is lower by 6.9 percent. Net revenue also fell by 25.4 percent year-on-year.

Nomura Wholesale Business Continues to Struggle

Taking a look at the operating results for its wholesale division, net revenue fell by 22.4 percent from the previous year to reach ¥555.4 billion. At the same time, non-interest expenses grew during the year by 8.5 percent to ¥666.8 billion. This was driven by a goodwill impairment attributable to wholesale, which significantly impacted the firm’s third-quarter results.

Breaking down revenues for the year, commissions contributed ¥298.1 billion towards total revenues, which is 21.5 percent less than the previous year. Nomura also noted a drop in the revenues made from the net gain on trading. Specifically, net gain on trading fell by 22.6 percent year-on-year to reach ¥342.96 billion.

According to Nomura Holdings’ Chief Financial Officer Takumi Kitamura it “will step up reforms to put it back on a growth path as early as possible.” Furthermore, the company and Nomura Securities Co. will not give out executive bonuses following the poor financial performance.

The poor results are not a complete surprise, as both the second and third quarter of Nomura reported consecutive losses. Furthermore, the company’s challenges abroad to make a profit, particularly in Europe, are public knowledge.

As Finance Magnates reported, the Japanese firm is planning to lay off more than 100 workers in its European operations, according to sources familiar with the matter. In addition, the company is planning to downscale is G10 FX, emerging markets and flow credit business.