Nomura Navigates Volatility with Record Profits, CFO Outlines Resilient Strategy

Nomura Holdings, Japan’s largest investment bank, has demonstrated its ability to thrive in turbulent markets, posting a record annual net profit of ¥340.7 billion ($2.4 billion) for fiscal 2024 (ended March 2025)—a 72% surge from the previous year. Chief Financial Officer Takumi Kitamura emphasized that the bank’s diversified business model and cost discipline allowed it to capitalize on volatility, positioning it as a leader in global financial services.

Financial Highlights: Growth Across All Segments

Nomura’s success was driven by strong performances across its core divisions:
- Wealth Management: Net revenue rose 12% to ¥451.5 billion, with pretax income jumping 39% to ¥170.8 billion, fueled by recurring revenue from investment trusts and insurance.
- Investment Management: Net revenue increased 25% to ¥192.5 billion, with pretax income surging 49% to ¥89.6 billion, aided by a 16% rise in assets under management to ¥88.8 trillion.
- Wholesale Banking: Net revenue grew 22% to ¥1.058 trillion, and pretax income tripled to ¥166.3 billion, benefiting from equity trading and cross-border M&A activity.

The bank’s total revenue hit ¥1.892 trillion, a 21% annual increase, while its effective tax rate fell to 26% due to stronger international profits. Shareholders also received a robust return, including a ¥34-per-share dividend (including a ¥10 commemorative dividend for its 100th anniversary) and a ¥60 billion share buyback program.

Strategic Resilience: Volatility as an Opportunity

Kitamura highlighted how market turbulence, such as post-April U.S. tariff announcements, created opportunities for Nomura’s trading divisions. Equity and foreign exchange volatility widened margins in the markets business, while cost-cutting measures improved efficiency. For instance, the wholesale division’s cost-to-income ratio dropped to 83% from 96%, and wealth management’s recurring revenue cost coverage ratio reached 76%.

The CFO also underscored the importance of geographic diversification. International regions (Americas, Europe, Asia-Pacific) contributed 29% of pre-tax profits, up from prior years, with the $1.8 billion acquisition of Macquarie Group’s U.S. and European asset management businesses reinforcing Nomura’s global footprint.

Challenges and Strategic Priorities

Despite quarterly volatility—net income dipped 29% in Q4 due to fixed-income headwinds—Kitamura remained optimistic. He noted that corporate clients were “waiting for clarity” on macro risks but expected a rebound once geopolitical uncertainties (e.g., U.S. elections) subsided.

The bank’s focus on stable, fee-based revenue remains central. Wealth management’s recurring revenue grew 29% year-over-year, while its workplace services segment exceeded targets, reaching 3.79 million customers. These streams mitigate reliance on volatile trading activity.

Conclusion: A Strong Foundation for Growth

Nomura’s fiscal 2024 results underscore its transformation into a resilient, globally competitive financial institution. With an ROE of 11.6% (annualized) exceeding its 2030 targets, and a diversified revenue base spanning wealth, asset management, and investment banking, the bank is well-positioned to navigate market fluctuations.

Key data points solidify this case:
- Profitability: Net income up 72%, with international profits tripling year-over-year to ¥137 billion.
- Cost Discipline: Non-interest expenses rose just 3% despite revenue growth.
- Shareholder Returns: A 49.4% payout ratio and buyback program reflect confidence in sustained earnings.

While short-term risks persist—such as regulatory changes and macroeconomic uncertainty—Nomura’s strategic focus on fee-based growth, geographic expansion, and operational efficiency makes it a compelling investment in an uncertain market. As Kitamura noted, “A certain degree of volatility really works in favor of our business.” For investors seeking a bank that thrives in turbulence, Nomura’s fundamentals offer a compelling argument.