Company eyes expanded opportunities in equities, private markets, and wealth management
Nomura Holdings aims to increase its revenue by over US$1 billion by expanding its reach in areas such as equities, private markets, and wealth management for high-net-worth individuals, according to the company’s CEO. Kentaro Okuda highlighted that the firm’s wholesale business platform enables it to confidently seize profit opportunities whenever market conditions change. “We aim not only to maintain but also to enhance the quality of this platform,” he said at an investment forum on November 29.
As the world faces rising interest rates and increased market volatility, Nomura is seeking new revenue streams after traditional sectors like brokerage fees and stock underwriting have slowed. For the quarter ending September, profits missed analysts’ expectations, with gains in fixed income trading unable to offset weaknesses elsewhere in the business.
To counter these challenges, Nomura plans to expand its successful equity business model in the Americas to other regions and tap into new fee opportunities within advisory services and international wealth management. This strategy will involve reviewing some administrative costs and the firm’s location strategy, according to a company presentation.
“We need to generate more revenue from equities, advisory, and wealth management to strengthen returns across our portfolio and build a resilient platform against external challenges,” Okuda explained.
The CEO’s efforts to steer Nomura back to profitability follow a series of difficult years, including a significant financial loss of around 311 billion yen (US$3.1 billion) related to the Archegos Capital Management collapse and costly litigation in the United States. The brokerage also faces pressure in its retail sector, where it has been underperforming compared to smaller rival Daiwa Securities Group in terms of pre-tax income for three consecutive quarters.
Nomura plans to cut approximately 20 billion yen in retail costs by March 2025, possibly through measures such as restricting hiring and closing some branch ATMs. This marks a renewed focus on transforming the retail division, which has historically served as a buffer during difficult times, including the 2008 Lehman Brothers acquisition fallout and the Archegos incident.
While the firm has set a pre-tax profit target of up to 130 billion yen for the retail division by the end of March 2025, it remains uncertain whether this target will be met, as stated by CFO Takumi Kitamura earlier this month.
