Nomura sets a shocking target on its income as they grow advisory and equities revenues to offset volatility amid its fixed-income business. The banks argued in a presentation that it targets a raise in pre-tax income for three main businesses. These businesses are retail, investment management, as well as wholesale. Overall, it would take the jump to $2.7bn-$3bn by the financial year ending in March 2025.
Previously, the core pre-tax income for the fiscal year in March 2022 was ¥205.2bn in Nomura. Nomura’s investment bank and markets division, or the wholesale division, faced the biggest jump raising from ¥74.5bn to ¥160bn-¥180bn. The bank added that they are confident in growing its footprint especially in equities and advisory. This is because the bank foresees a steadier source of income than fixed income. It has traditionally succeeded in the past.
Kentaro Okuda, the CEO from Nomura noted that fixed income business revenue grows significantly. The range is around 35% per year. The bank would target around 50% or double its growth in advisory revenues in three years. Plus, they would seek to determine the success they have reached in the U.S. for its equities business and derivatives in both Asia and Japan. They would execute this plan while maintaining its macro standing business in rates and foreign exchanges.
Steve Ashley delivered that so far Nomura relies a lot on fixed income, historically. It was also traditionally the bedrock of their franchise. Ashley is a senior managing director and head of the wholesale. He added that, somehow, Nomura should not rely too much in this product. It is important to forecast the intense volatility and asset class. Thus, they must set a plan to leverage their growth areas.