Nomura plans to nearly double its profit by 2030, with a significant shift in its growth strategy. Led by Chief Executive Officer Kentaro Okuda, the Japanese brokerage giant seeks to achieve an income before taxes surpassing ¥500 billion ($3.2 billion) by March 2031, Bloomberg reported.
Refocusing Resources for Growth
Nomura's strategy is based on repositioning its wholesale division, a core component encompassing trading and investment banking activities. Okuda emphasized the need for the wholesale business to autonomously sustain its growth by adopting a self-funding model.
While Nomura experienced a resurgence in annual profit last year, challenges persist, particularly in managing costs within the wholesale segment overseen by Christopher Willcox. However, the company is actively exploring growth areas in trust banking, investment management, and international wealth management to diversify its revenue.
Nomura aims to significantly reduce the wholesale arm's cost-to-income ratio by March 2031. Additionally, the firm is pursuing expansion in international wealth management, targeting substantial growth in assets under management over the medium and long term.
At our Investor Day in #Tokyo, our Group CEO Kentaro Okuda announced our 2030 management vision: Reaching for Sustainable Growth. He also outlined ROE target of 8~10%+ and pretax income of over Y500bn. View full CEO and senior management presentations: https://t.co/VodySCvAGs pic.twitter.com/kweHqvEwaW
— Nomura (@Nomura) May 14, 2024
Additionally, Nomura's growth strategy focuses on emerging opportunities in India and the Middle East. In India, the firm plans to strengthen its client base across various business lines, while in the Middle East, efforts will be directed towards enhancing local capabilities and hiring specialized talent. Besides that, Nomura is focusing on China, where it has undergone significant restructuring to mitigate losses.
Nomura's Q3 Earnings
During the third quarter of the fiscal year ending March 2024 (FY24), Nomura experienced a notable upturn in financial performance. The company's consolidated net revenue for the third quarter grew from the previous quarter to 400.2 billion yen (S$2.8 billion). This surge of 9% was accompanied by a 39% boost in income before taxes, amounting to 78.7 billion yen ($558 million), compared to the last quarter.
However, compared to the same period last year, there was a 6% decrease in income before taxes. Despite these fluctuations, Nomura's net income attributable to shareholders experienced a growth of 43% quarter-on-quarter, reaching 50.5 billion yen (US$358 million).
Besides that, Nomura's retail division reported a notable increase in net revenue. Income before taxes in this segment increased 141% from last year. The company attributed this surge to effective staff realignment and favorable market conditions.
