Nomura Holdings, Inc. is set to enhance its profitability and earnings stability over the next 12-18 months, according to a recent report by Moody’s Ratings. The ratings agency anticipates that improvements in both Nomura’s international wholesale business and its domestic securities business will contribute to stronger financial performance.
Moody’s highlighted that Nomura’s efforts to bolster its risk management framework and stabilize earnings would help mitigate the risk of significant losses and reduce earnings volatility. The agency affirmed Nomura’s Baa1 ratings and maintained a stable outlook for the firm.
The company’s strategies include diversifying revenue sources in the wholesale segment, increasing earnings from the more stable wealth management and investment management sectors, and focusing on cost efficiency.
Nomura’s profitability, as measured by return on average assets (ROAA), improved to 0.6% (annualized) during the first nine months of fiscal 2024, ending March 2025. This marks a positive trend driven by enhanced business momentum in both domestic and international securities markets, as well as effective cost management. The bank successfully reduced its wholesale segment’s expense ratio to 84%, a significant improvement from 95% the previous year.
A key factor in enhancing Nomura’s credit profile is its consistent track record of stabilizing its international wholesale business, which has historically been plagued by weak profitability and high earnings volatility. Moody’s emphasized that the ability to maintain this stability is crucial for Nomura’s long-term financial strength.
Additionally, Nomura boasts an adequate buffer against unexpected risks, with a Common Equity Tier 1 (CET1) ratio of 16.3% as of December 2024. Approximately 17% of its total assets are composed of government securities, cash equivalents, and time deposits, providing further financial stability.
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