Nomura Posts Strong Core Performance, Announces Buyback Despite Digital Asset Setback

Nomura Navigates Market Volatility: Core Strength Offsets Crypto Weakness, Buyback Announced

TOKYO – Nomura Holdings, Inc. (NYSE: NMR) unveiled a mixed set of results for its third fiscal quarter, showcasing remarkable resilience in its traditional businesses while grappling with turbulence in its nascent digital asset ventures. The global financial services group reported sustained profitability across its core divisions, enabling a seventh straight quarter of return on equity (ROE) above its long-term target. This core strength provided a buffer against losses elsewhere, allowing management to commit to a substantial share repurchase aimed at rewarding shareholders.

Group-wide net revenue climbed 7% quarter-over-quarter to ¥551.8 billion. A closer look reveals a tale of two halves: the combined pre-tax income for Nomura's four main divisions—Retail (Wealth Management), Investment Management, Wholesale, and Banking—surged 8% to ¥142.9 billion, a level not seen in over 18 years. Conversely, the "Other" segment, which houses digital asset-related operations like its Laser Digital unit, dragged on performance due to adverse market conditions.

"The consistency of our core franchise is undeniable," said Chief Financial Officer Hiroyuki Moriuchi during the earnings call. "Achieving a 10.3% ROE for seven consecutive quarters demonstrates the durability of our business model, even as we manage through cyclical headwinds in specific areas."

Division Deep Dive: Wealth Management Leads, Investment Management Integrates

The standout performer was the Wealth Management division, where pre-tax income jumped 29% and the pre-tax margin exceeded 40%. Management highlighted record recurring revenue, fueled by net inflows surpassing ¥500 billion, as evidence that Japan's long-anticipated "shift from savings to investment" is gaining irreversible momentum.

Investment Management presented a transitional picture. While assets under management hit a record ¥134.7 trillion, pre-tax income fell 42% due to one-off costs from the recent acquisition of Macquarie's public asset management business. Management stressed that the deal, which added approximately ¥25 trillion in AUM, positions the unit for future growth despite near-term integration expenses.

The Wholesale division (Global Markets and Investment Banking) also posted strong gains, with Investment Banking net revenue reaching its highest level for the period since 2017.

Strategic Moves and Outlook

In response to its solid capital position—with a Common Equity Tier 1 ratio of 12.8%—Nomura announced a share buyback program of up to 100 million shares or ¥60 billion, scheduled from February to September. Moriuchi linked the decision's timing to the clarified capital impact following the Macquarie deal closure.

On the digital asset front, the CFO acknowledged inherent volatility, noting that Laser Digital was negatively impacted by market moves in October and November. "We are tightening risk controls to limit short-term fluctuations while maintaining our strategic commitment to this evolving space over the long term," he stated.

Looking ahead, early January trends suggest Wealth Management revenue holding steady, while Investment Banking has started slower but with a solid pipeline.

Market Voices: Analysts and Observers Weigh In

David Chen, Portfolio Manager at Asuka Capital (Tokyo): "This report confirms Nomura's core engine is firing on all cylinders. The buyback is a confident signal that management sees the stock as undervalued. The digital asset losses are a footnote in an otherwise strong narrative about franchise strength and capital discipline."

Mikael Forsberg, Senior Financials Analyst at Nordea Insights (Stockholm): "The 18.5-year high in core divisional profit is the key takeaway. It shows their restructuring and focus are paying off. The Macquarie integration costs were expected; the future fee revenue from that AUM will be the metric to watch."

Eleanor Vance, Editor at "CryptoFinance Digest" (London): "It's the same old story from traditional finance dipping its toes into crypto. They trumpet the 'long-term potential' when markets are up, then blame 'volatility' and 'tighten controls' at the first sign of a downturn. Nomura's digital arm is clearly a cost center, not the growth driver they hoped for. How much more shareholder value will be eroded for this experiment?"

Kenji Tanaka, Independent Market Strategist (Osaka): "The sustained high ROE and the buyback are directly positive for shareholders. More importantly, the strength in Wealth Management flows indicates a structural change in the Japanese investor psyche. That's a powerful, multi-year tailwind Nomura is uniquely positioned to ride."