Japan's biggest investment bank and brokerage Nomura Holdings (8604.T) recorded a 27% rise in fourth-quarter net profit to hit its highest ever full-year profit as revenue grew in each of its business segments over the year.
The results are for the period up to the end of March and do not account for the market turmoil that followed the U.S. tariff announcements in April, however Nomura can ride out the volatility, its chief financial officer said.
"A certain degree of volatility really works in favour of our business," CFO Takumi Kitamura said at an earnings briefing.
Although individual customers' investment activity slowed, there had been no rush to sell assets since the start of April.
Meanwhile volatility had widened margins in equity and foreign exchange trading in Nomura's markets unit such that revenue trends were above levels in the three months to March, Kitamura said.
Nomura also has faith in U.S. financial markets in the medium and long term, which lay behind its acquisition of Australian Macquarie Group's (MQG.AX) U.S. and European public asset management businesses for $1.8 billion this week, Kitamura said.
"Of course the stock market will rise and fall in the short term, but in the medium to long term it is strong, the U.S. population in growing and we see it as a clear growth market," Kitamura said.
Nomura reported a profit of 72 billion yen ($501.15 million) for the January-March period, versus 56.8 billion yen in the same period a year prior, and announced a share buyback of up to 60 billion yen.
It has cemented a dominant position among Japanese securities firms and its earnings in recent quarters have comfortably exceeded those of rivals Daiwa Securities and Mizuho Securities.
Its management has long sought to become a global investment bank, but with chequered results. The Macquarie acquisition marks its most ambitious expansion abroad since its purchase of Lehman Brothers' assets in 2008, which it later wrote down.
Asset management has become a core growth area for Japanese financial institutions which are looking to secure stable fee-based revenue that is less affected by the ups and downs of market sentiment.
On the outlook for the wholesale division, which houses Nomura's investment banking and global markets units, Kitamura said market volatility since the start of April has led to many companies adopting a wait and see approach and holding off on equity issuance or M&A.
But when markets calm, activity should return to normal, Kitamura said.
($1 = 143.6700 yen)
