NOMURA HOLDINGS, INC

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Nomura : Investor Day Steven Ashley Head of Wholesale Nomura Holdings, Inc.

05/12/2021 | 03:38am

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)

  1. Includes International Wealth Management, Advisory and Execution Services
  2. Includes Client Financing and Solutions excluding Private Markets
  3. Awarded by GlobalCapital
  4. Source: Inframation; #9 on the North America Project Finance League table for CY2021YTD as of 31 March, 2021
  5. 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

  1. International ECM includes activity in Americas, EMEA and AEJ; Wolfe Strategic Alliance relates to US ECM activity only
  2. Awarded Best Secondary Listing for New Oriental Education & Technology
    Group's $1.5bn HK secondary listing in FY20/21
  3. Awarded Best IPO and Best ECM Deal for JD.com's HK $34.6bn secondary listing in FY20/21
  4. Awarded Best of South Asia for SBI Cards' INR 103.4bn IPO in FY20/21
  1. Awarded for Niche-Market Bond (World Bank's A $1.65bn dual-tranche sustainable development bond) in FY20/21
  2. Priority clients in Secondary Trading defined as top 250 clients
  3. 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

  1. 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
  2. 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

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.

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