Nomura Holdings Inc. reported its highest quarterly profit in four and a half years, as Japan's largest brokerage capitalized on robust trading revenues and a surge in investment banking deals amid favorable market conditions.

Nomura Posts Best Quarterly Profit Since 2020 on Strong Trading, Banking Gains

The Tokyo-based financial giant posted a pretax profit of 138.3 billion yen ($879 million) for the fiscal third quarter ended December 31, marking a 76% jump from the previous year. Net income more than doubled to 101.4 billion yen ($644 million), while revenue climbed 25% to 502 billion yen ($3.2 billion).

Although key financial indicators showed a slight decline compared to Q2, they rose significantly from Q1, when net income stood at 68.9 billion yen ($428 million).

The results reflect Nomura's successful pivot toward more stable revenue streams and international expansion, with overseas operations contributing approximately 40% of firmwide profits. The company's return on equity reached 11.8%, exceeding its target range of 8–10%.

“We are seeing the results of our medium to long-term strategy to strengthen our business portfolio by growing our stable revenues and diversifying our revenue streams, while effectively controlling costs and capital,” said Kentaro Okuda, Nomura's President and Group CEO. “This reinforces our confidence in our current direction.”

Trading and Investment Banking on the Rise

The Wholesale division, which houses Nomura's trading and investment banking operations, recorded its best quarterly performance since 2021, with pretax income surging 171% year-on-year to 62.4 billion yen ($397 million). Investment banking revenues hit their highest level since 2017, boosted by advisory services and financing solutions.

Wealth Management also continued its winning streak for the seventh consecutive quarter, with pretax income rising 45% year-on-year to 46.2 billion yen ($294 million), supported by record-high recurring revenue. The Investment Management division saw assets under management reach new heights, although its quarterly profit declined 41% from the previous quarter to 18.9 billion yen ($120 million).

For the nine-month period, Nomura's net income surged 146% to 268.8 billion yen ($1.7 billion), positioning the firm well to achieve its annual pretax income target of over 500 billion yen ($3.2 billion).

“Looking ahead, we will continue to intensify our global strategy leveraging our Japan franchise to consistently achieve ROE of 8 to 10 percent or more and pretax income of over 500 billion yen,” Okuda concluded.

Nomura Revamps FX Options Unit

Nomura Holdings is restructuring its foreign exchange (FX) options division following a series of staff departures from key trading hubs. The Japanese financial institution's decision signals a shift in its derivatives strategy, according to industry sources.

Over the past year, approximately eight traders have left the bank's London and New York offices, many of whom had joined since 2022. Despite this turnover, the FX options division has generated $60 million in revenue since April, surpassing the previous fiscal year's $50 million. The unit benefited from trading opportunities tied to the U.S. elections, with a rally in the dollar index during Donald Trump’s victory creating favorable market conditions.

Additionally, Nomura has seen a 400% rise in client algorithmic FX trading activity since January 2023. This growth comes as the firm adjusts its leadership structure; two months ago, John Tierney was appointed CEO of Nomura Europe Holdings and Nomura International, succeeding Jonathan Lewis after his ten-year tenure.