Nomura's Strategic Transformation and Sustainable Growth in FY2025/26

In the evolving landscape of global finance, Nomura Holdings has emerged as a standout example of strategic reinvention. As the Japanese financial services giant navigates the challenges of a post-pandemic economy, its FY2025/26 performance underscores a deliberate shift toward recurring revenue streams, robust return on equity (ROE), and sustainability-driven growth. For investors, the question is no longer whether Nomura can adapt but how effectively it is leveraging these pillars to create long-term shareholder value.

Recurring Revenue Growth: A Cornerstone of Stability

Nomura's strategic transformation has prioritized the expansion of recurring revenue, a critical factor in mitigating volatility in cyclical markets. The Wealth Management segment, a key driver of this strategy, reported recurring revenue assets of ¥26.2 trillion in the first half of FY2025/26, up from ¥18.2 trillion in FY2020/21. This 44% growth reflects sustained client confidence and the firm's ability to convert transactional business into stable, long-term income. Similarly, the Investment Management division achieved record assets under management (AuM) of ¥101.2 trillion, fueled by consistent net inflows and a diversified product suite. These figures highlight Nomura's success in building a business model less susceptible to macroeconomic shocks, a trait increasingly valued by investors in uncertain times.

ROE Performance: Exceeding Targets with Operational Discipline

Nomura's ROE performance in FY2025/26 has been equally impressive. For the first half of the fiscal year, ROE reached 11.3%, with Q2 alone hitting 10.6%-maintaining the company's streak of six consecutive quarters above its 8–10% target range. This achievement is underpinned by cost controls, operating leverage, and the self-sustained growth of the Wholesale segment, which saw a 43% year-on-year increase in pre-tax income. CFO Hiroyuki Moriyuchi has emphasized that this profitability is not a short-term anomaly but a result of structural reforms, including digitalization and regional diversification. Such operational discipline ensures that Nomura's ROE remains a reliable indicator of its ability to generate returns in both bull and bear markets.

Sustainability as a Strategic Lever

Beyond financial metrics, Nomura's FY2025/26 strategy has integrated sustainability as a core component of its value proposition. The firm aims to exceed a 70% renewable energy adoption rate by FY2025/26, with a long-term goal of 100% renewable energy use by FY2030/31. These targets align with its broader roadmap to achieve net-zero greenhouse gas emissions from operations by FY2030/31 and from its investment portfolio by FY2050/51. By embedding decarbonization into its business model, Nomura not only mitigates regulatory risks but also taps into the growing demand for ESG-aligned investments. For instance, its advisory services and sustainable finance products are now pivotal in supporting clients' decarbonization efforts, creating a dual benefit of revenue growth and societal impact.

Shareholder Value Creation: Dividends and Buybacks in Sync

Nomura's commitment to shareholder returns is evident in its FY2025/26 capital allocation strategy. The company has set a total return ratio target of 40–50%, with interim dividends announced at 36.0 yen per share (adjusted for a 5-for-1 stock split) and a minimum dividend yield of 4% according to the company's official announcement. Share buybacks have further accelerated this value creation: in October 2025 alone, Nomura completed a major repurchase program, contributing to a 47.6% progress toward its annual target. These initiatives, coupled with recurring revenue growth and ROE performance, demonstrate a clear link between operational strength and shareholder rewards. As noted in the 2025 Nomura Report, the firm's "connection" theme-linking capital, information, and communities-ensures that value creation is both sustainable and inclusive.

Conclusion: A Model for Resilient Growth

Nomura's FY2025/26 results illustrate a company that has successfully balanced short-term profitability with long-term resilience. By prioritizing recurring revenue, maintaining ROE above its targets, and embedding sustainability into its operations, the firm has laid a foundation for enduring shareholder value. For investors, the key takeaway is that Nomura's strategic transformation is not merely a response to market pressures but a proactive, multi-dimensional approach to future-proofing its business. As the financial sector continues to evolve, Nomura's ability to harmonize financial performance with ESG goals positions it as a compelling case study in sustainable growth.