Investor Day
Steven Ashley
Head of Wholesale
Nomura Holdings, Inc.
May 12, 2021
Connecting Markets East & West
© Nomura
Core Platform Has Grown in Resilience and Strength
Repositioning Of Wholesale Platform and Other Actions Helped To Improve Wholesale Performance
Pre-Tax Income (billions of yen) | Repositioned Wholesale Platform since April 2019 | |||||||||||||||||||||||||||||||||
Markdown on 88 | 77 | |||||||||||||||||||||||||||||||||
loan-related | 65 | |||||||||||||||||||||||||||||||||
43 | positions (JPY | |||||||||||||||||||||||||||||||||
c.JPY35bn) | ||||||||||||||||||||||||||||||||||
20 | 19 | |||||||||||||||||||||||||||||||||
5 | 10 | |||||||||||||||||||||||||||||||||
(7) | Good-will | (13) | ||||||||||||||||||||||||||||||||
impairments | Loss related to | |||||||||||||||||||||||||||||||||
(JPY81bn) | ||||||||||||||||||||||||||||||||||
transactions | ||||||||||||||||||||||||||||||||||
(96) | with US client | |||||||||||||||||||||||||||||||||
(JPY245.7bn) | ||||||||||||||||||||||||||||||||||
(166) | ||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||||||
FY18/19 | FY19/20 | FY20/21 | ||||||||||||||||||||||||||||||||
Target | ||||||||||||||||||||||||||||||||||
Rev/RWA4 | 5.0% | 6.5% | 6.4% | ~6% | ||||||||||||||||||||||||||||||
(6.8%)2 | (8.3%)3 | |||||||||||||||||||||||||||||||||
CIR (Expenses / | ||||||||||||||||||||||||||||||||||
1 | 86% | 91% | | |||||||||||||||||||||||||||||||
Revenue) | 105% | (81%)2 | (65%)3 | <82% | ||||||||||||||||||||||||||||||
Fee & Commission | ~1.15bn | |||||||||||||||||||||||||||||||||
$1.1bn | $1bn | $1.3bn | ||||||||||||||||||||||||||||||||
Based Revenue5 |
Transformed platform focused on core set of profit centres and areas of strength
Diversified business mix across products and clients; reinforced offering in Private Markets
Pro-actively rebased costs and improved resource efficiency
1. | Excludes ¥81bn of goodwill impairments | Modified risk-weighted assets (daily average for the accounting period) is a non-GAAP financial measure and is the total of (i) risk- | ||
2. | Excludes ¥35bn of Markdown on loan-related positions | weighted assets (as calculated and presented under Basel III) and (ii) an adjustment equal to the regulatory adjustment to common | ||
3. | Excludes ¥245.7bn of one-off loss (¥204.2bn as trading loss and ¥41.6bn as loan loss provision in expenses line) related to | equity tier I capital calculated and presented under Basel III divided by our internal minimum capital ratio target. | ||
transactions with US client | 5. | Includes International Wealth Management, Advisory and Execution Services | 1 | |
4. | Wholesale net revenue divided by modified risk-weighted assets (daily average for the accounting period) used by Wholesale. | |||
Narrowed Platform to Core Set Of Profit Centres
- Built "Centres of Excellence" by strengthening core product capabilities, contributing significantly to Wholesale revenue
- Right-sizedthe platform by exiting or reducing lower growth and unprofitable businesses
Distribution of each product by PTI contribution at regional level
Histo- | Curr |
Positioning and
13/14 -15/16
Avg
High
(Income
before
income
taxes)
strategy and region by Profitability
16/17 -18/19
Avg
19/20 -20/21
Avg
Increased strong
PTI generating
businesses -
"Profit Centres"
Streamlined and
Optimised portfolio
Japan Equities1
Japan Fixed
Income1
US RMBS5 (new
issuance securitization)
US Listed Eq.
Options6
EGB7
AeJ Credit8
AeJ FX/EM8
Global M&A9
rical | ent | |
17.6% | >20% | |
9.0% | 9.7% | |
1.9% | 13.5% | |
7.6% | 11.4% | |
2.7% | 8.1% | |
5.4% | 7.7% | |
2.4% | 4.6% | |
2.8% | 5.9% | |
Strength
Equity House of the
Year-20192; #1 in ECM3
Most Impressive FIG
House in Yen4
Rank 2 since 2018
Currently Ranked #2
(Q4 2020)
Consistently in Top 3
since 2019
Top 4 in 2020
Top 7 since 2019
#11 overall; #1 in Japan
M&A
Low (Loss before income taxes)
Meaningfully reduced loss making businesses
- Exited EMEA Equities (ex. Instinet), ECM, Equity Research
- Reduced US and EMEA Flow Credit
- Restructured US FX
1. | Source: Coalition Greenwich Competitor Analytics. Market share represents Nomura's 5. | Source: Bloomberg, deal count share; Historical market share based on CY2016, | following peer group: BAC, BARC, BNPP, CITI, CS, DB, GS, HSBC, JPM, MS, UBS. | |||
share of the total Industry Revenue Pool based on historical FX rates. Analysis is | current based on CY2020 | Market share represents Nomura's share of the total Industry Revenue Pool based on | ||||
based on Nomura's internal business structure and internal revenues; Historical based 6. | Source: Third Party Research; Historical market share based on Q1 2015, current | historical FX rates. Analysis is based on Nomura's internal business structure and | ||||
on CY2016, current based on 1H 2020 | based on Q4 2020 | internal revenues | ||||
2. | Equity House of the Year awarded by Refinitiv | 7. | Source: Bloomberg, based on duration weighted trading volume share; Historical | 9. | Source: Bloomberg, market share & ranking based on global announced M&A deal | |
3. | Source: Dealogic; Japan ECM League table for FY20/21 based on revenues | market share based on FY15/16, current based on FY20/21 | volume for calendar year; Historical based on CY2019 & current based on CY2020 | 2 | ||
4. | Awarded by GlobalCapital in 2020 | 8. | Source: Coalition Greenwich Competitor Analytics. Ranking is based upon the | |||
Diversified Business Mix Across Products And Clients
- Diversified Wholesale portfolio into high RoE, fee-generating businesses (Advisory, IWM, Execution Services) and steady accrual based income (Private Markets), complemented by strengths in Japan and International regions
- Consistent approach to priority clients to increase the depth and breadth of the client franchise
International Revenue | CAGR (2Y) |
Private | |
Markets | 16% |
Fee and
Commission
Based8%
Revenue 1
Financing & | 2 | 6% |
Solutions |
20/21 19/20 18/19
- US RMBS Bank of the year - 20203
- Top 10 league table position for project finance loans in North America4
- Top 5 position in ABS Real Estate Financing in EMEA5
- Wealth Management surpassed $10bn AuM in FY20/21
- Highest International Advisory revenue in last 4 years
-
Execution Services increased by 14% since 19/20
(Instinet growth at 13%+ since 19/20) - Highest International ECM revenue over the last 5 years, including Americas activity through Wolfe Strategic Alliance6
- Record EMEA DCM performance
- Major deal awards in AEJ incl. Asset Awards7, GlobalCapital Asia Awards8, FinanceAsia Awards9 and IFR Awards10
Revenue growth in Wholesale11 with priority
clients
>7% CAGR | Increase in Cross-regional revenue within | >20% |
(Since 2018/19) | Wholesale12 | (Since 2019/20) |
- Includes International Wealth Management, Advisory and Execution Services
- Includes Client Financing and Solutions excluding Private Markets
- Awarded by GlobalCapital
- Source: Inframation; #9 on the North America Project Finance League table for CY2021YTD as of 31 March, 2021
-
Source: Coalition Greenwich Competitor Analytics. Ranking is based upon the
following peer group: BAC, BARC, BNPP, CITI, CS, DB, GS, HSBC, JPM, MS,
UBS. Analysis is based on Nomura's internal business structure and internal
revenues
- International ECM includes activity in Americas, EMEA and AEJ; Wolfe Strategic Alliance relates to US ECM activity only
-
Awarded Best Secondary Listing for New Oriental Education & Technology
Group's $1.5bn HK secondary listing in FY20/21 - Awarded Best IPO and Best ECM Deal for JD.com's HK $34.6bn secondary listing in FY20/21
- Awarded Best of South Asia for SBI Cards' INR 103.4bn IPO in FY20/21
- Awarded for Niche-Market Bond (World Bank's A $1.65bn dual-tranche sustainable development bond) in FY20/21
- Priority clients in Secondary Trading defined as top 250 clients
- Cross-regionaldefined as GM trades with sales and trading from different regions (EMEA, US, Japan and AEJ). IB cross-regional defined as deals with revenue sharing between two or more regions
3
Forward Strategy: Increase Resilience and Drive Growth
Delivery of 22/23 KPIs and external targets | Improve Platform Stability and Drive Growth |
Pre-Tax Income (¥ billion)
Outperformance | ||||
normalisation | ||||
Markdown on | ~150 | Advisory, | 1 | |
loan-related | ~130 | |||
IWM & | ||||
positions and one- | Increasing | |||
Digital | ||||
off loss from | PTI growth | 120 | ||
transactions with | 2 | |||
US client1 | target to | |||
78 | ~¥150bn PTI | |||
3 | ||||
Last 8 | Normalised | 22/23 | Medium Term | |
Quarters | Run-rate | 4 |
Run-rate2
Rev/RWA3 | 6.4% | >6% | >6% | ||
(7.6%)5 | |||||
CIR (Expenses / | |||||
88% | 82% | ~80% | |||
Revenues) | |||||
(72%)5 | |||||
Fee and | |||||
commission | |||||
~1.1 | ~1.3 | >1.3 | |||
based revenue | |||||
($bn)4 | |||||
Growth in Private Markets and Low Risk-
Density Areas
Medium Term Ambition | ||
Reinforcing Private | ||
>40% growth over | ||
Markets | next 2-3 years | |
Scaling-up Advisory | ||
50%+ growth over | ||
Business | next 3 years | |
Growth in Wealth | ||
Targeting 5x AuM6 | ||
Management | ||
Digital Technology | $100m+ revenue | |
Building leadership in 'Sustainable Finance'
Leverage cross-divisional linkages and
strategic partnerships
- Annualised average PTI for FY19/20 and FY20/21 excluding Markdown on loan- related positions of ¥35bn in 19/20 and one-off loss from transactions with US client of ¥245.7bn (¥204.2bn as trading loss and ¥41.6bn as loan loss provision in expenses line) in 20/21
- Annualised average PTI for FY19/20 and FY20/21
3. | Wholesale net revenue divided by modified risk-weighted assets (daily average for the | presented under Basel III divided by our internal minimum capital ratio target. | ||
accounting period) used by Wholesale. Modified risk-weighted assets (daily average | 4. | Includes International Wealth Management, Advisory and Execution Services | ||
for the accounting period) is a non-GAAP financial measure and is the total of (i) risk- | 5. | Excluding Markdown on loan-related positions in 19/20 and one-off loss from | ||
weighted assets (as calculated and presented under Basel III) and (ii) an adjustment | transactions with US client in 20/21 | 4 | ||
equal to the regulatory adjustment to common equity tier I capital calculated and | 6. | Wealth Management 5x AuM growth target is against FY19/20 levels |
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Disclaimer
Nomura Holdings Inc. published this content on 12 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2021 07:37:05 UTC.