Nomura Holdings, Inc. (NYSE:NMR) Q1 2021 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 05:30 am ET

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Nomura Holdings, Inc. (NYSE:NMR) Q1 2021 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, everyone, and welcome today's Nomura Holdings First Quarter Operating Results for Fiscal Year Ending March 2021 Conference Call. Please be reminded that today's conference call is being recorded at the request of the hosting Company. Should you have any objections, you may disconnect at this point in time. During the presentation, all the telephone lines are placed on listen-only mode. A question-and-answer session will be held after the presentation.

Please note that this telephone conference contains certain forward-looking statements and other projected results, which may involve known and unknown risks, delays, uncertainties and other factors not under the Company's control, which may cause actual results, performance or achievement of the Company to be materially different from the results, performance or other expectations implied by these projections. Such factors include economic and market conditions, political events and investor statements, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number, and timing of transactions.

With that, we'd like to begin the conference. Mr. Takumi Kitamura, Chief Financial Officer, please go ahead.

Executive
Takumi Kitamura

Good evening, this is Takumi Kitamura, CFO of Nomura Holdings. First, I would like to express my sincere condolences to those affected by the recent heavy rain in Japan and pray for a speedy recovery from this disaster. Our thoughts also go out to people affected by the coronavirus outbreak and we pray for a quick recovery for those who are currently ill.

I will now give you an overview of our financial results for the first quarter of the fiscal year ending March 2021 using the document titled Consolidated Results of Operations.

Please turn to Page 2. As I said, when we announced our results in May, the rapid spread of coronavirus around the world caused markets to plunge in March and the fixed income market saw a flight to quality as safe assets such as government bonds were swept up and risk off sentiment took hold in the corporate bond market and emerging markets. Volatility spiked to levels not seen since the Lehman Brothers crisis, causing substantial market turbulence.

In the April to June quarter, however, turbulence subsided as investor sentiment improved on expectations of an economic recovery and large-scale provision of liquidity by central banks, lifting stock market indices and bond prices. This prompted robust trading of domestic and international stocks by retail investors in Japan, while institutional investor activity picked up on the back of portfolio rebalancing.

Amid this environment, first quarter income before income taxes totaled JPY181.8 billion and net income was JPY142.5 billion, reflecting a strong rebound from last quarter's loss. These results represent the second best quarter since we started reporting under U.S. GAAP in the year ended March 2002.

As you can see in the graph on the bottom right, three segment income before income taxes increased by 6.2 times quarter-on-quarter to JPY122.1 billion. Wholesale reported a strong rebound in earnings. We saw the benefits of realigning our business portfolio last year