Nomura reported a dramatic revenue fall in profits of 69.9 per cent for the three months ended 30 June to 19.8 billion yen ($1.9 billion), down from 65.9 billion yen a year ago.

Japan-headquartered Nomura Holdings reported a dramatic revenue fall in profits of 69.9 per cent for the quarter to 19.8 billion yen ($1.9 billion), down from 65.9 billion yen a year ago. Broker commissions were reportedly hit as investors turned cool toward the government's fiscal and monetary reforms.

The firm said in a statement for the quarter ending 30 June that net revenue fell 14 per cent to 370.8 billion yen, compared to 431.3 billion yen the prior year, while quarterly revenue fell 9 per cent from a year ago to 462.2 billion yen.

“We faced a challenging environment in the first quarter as geopolitical risk increased and investors weighed the outlook for monetary policy. This led to lower volatility globally and a decline in market trading volumes,” Nomura said of its results.

“Amid this environment, Retail and Asset Management both reported higher revenues quarter on quarter, while Global Markets delivered solid revenues in line with last quarter. As a result, net revenue from our three core business segments increased 1.0 per cent over last quarter. At the Group level, net revenue declined 5 per cent to 370.8 billion yen due to a 7 billion yen loss related to tightening of our own credit spread and following the 18 billion yen realised gain booked last quarter on the sale of Fortress shares,” it said.

The firm said it also booked 18 billion yen in Full Career Retirement, or FCR, related expenses, a factor which increases costs specifically in the first quarter.

“As a result of these factors, pretax income declined 42 per cent quarter on quarter to 51.7 billion yen, and net income declined 68 per cent to 19.9 billion yen. ROE for the quarter was 3.2 per cent and EPS was 5.26 yen,” it said.

Net income attributable to shareholders was 19.9 billion yen compared to 65.9 billion yen, for the previous year. Earnings per share was 5.26 yen, compared to 17.24 yen.

Nomura said that in its investment banking business, revenue fell 24 per cent to 22.3 billion yen. Investment banking fees slid 22 per cent to 19.8 billion yen, while trading profit rose 24 per cent to 158.6 billion yen. The total capital ratio was 15.3 per cent and its Tier 1 ratio was 13.0 per cent under Basel 3.

Nomura had total assets of 43.9 trillion yen and shareholders' equity of 2.5 trillion yen.

"We reported solid net revenue from our three core businesses in the first quarter as Retail and Asset Management posted higher revenues compared to last quarter and wholesale revenues remained resilient," said Koji Nagai, Nomura's Group chief executive.

"Retail client assets climbed to 95.3 trillion yen, the second highest level ever, highlighting progress in the transformation of our retail business model. Asset management had its best quarter since September 2007 as assets under management continued to grow and the Taiwanese asset management firm we acquired in April contributed to earnings,” added Nagai.

Last month, Nomura launched a new wealth management division within the retail arm, which integrates its Japan wealth management and Asia wealth management businesses. The new division will be overseen by Juntaro Kimura as senior managing director and head of wealth management at Nomura.