Echoing Wall Street, Nomura (NMR.US) Profits Big in Stock Market Boom: Q2 Single-Quarter Profit Hits Second-Highest in History, Stock Trading Revenue Soars 83%

According to Zhitong Finance APP, driven by the stock market trading boom, Japan's largest brokerage Nomura Holdings (NMR.US) delivered an impressive set of results.

The earnings report released by the company on Wednesday shows that net profit for the first fiscal quarter (ended June 30) jumped 39% year-on-year to 145.6 billion yen (approximately $890 million), far exceeding market expectations of 111.5 billion yen and hitting its highest quarterly profit since 2002, marking the second highest in the company's history.

This performance extends Nomura's strong momentum from the previous fiscal year and once again confirms that vibrant global capital markets are bringing generous returns to major financial institutions.

Equity Trading Revenue Hits Record High; Wholesale Business Shows Broad-Based Strength

The standout highlight of Nomura's performance this quarter came from its equity trading business. The financial report shows equity business revenue soared 83% year-on-year to a record-breaking 179.4 billion yen. This was mainly due to a combination of positive factors both at home and abroad, echoing the performance of Wall Street giants such as Goldman Sachs (GS.US). Previously, disruptions caused by Middle East conflicts and volatility driven by the artificial intelligence (AI) investment boom also pushed Wall Street banks' equity trading revenues to record levels.

The wholesale business segment, which includes global markets and investment banking, saw total revenue surge 41% year-on-year to its highest level since the department was established in April 2010. Fixed income business revenue grew 12%, while investment banking revenue increased 33% to 50.4 billion yen, setting a new all-time record for first-quarter revenues.

Nomura Chief Financial Officer Hiroyuki Moriuchi revealed at a press conference that the company's pipeline of financing deals is significantly stronger than the same period last year, but he also cautioned that geopolitical uncertainty could delay some transactions.

Notably, wholesale division cost controls also paid off, with its key cost-to-income ratio metric improving significantly from 86% last quarter to 75%.

Wealth Management Continues to Perform; Overseas Business Achieves Record Pre-Tax Profit

Against the backdrop of domestic Japanese inflation eroding savings and retail investors seeking higher-yielding assets, Nomura's wealth management business—dominant among high-net-worth clients—continued to provide a stable profit source. This segment’s revenue rose 37% year-on-year this quarter, achieving growth for the fourth consecutive quarter, with recurring revenue hitting a historical high. Pre-tax profit soared 83% compared to a year ago, reaching 71.1 billion yen.

As for overseas operations, although the European division recorded a pre-tax loss for the third consecutive quarter—partly due to the drag from the cryptocurrency business—the overall overseas unit still performed well. Pre-tax profit outside Japan totaled 75.2 billion yen this quarter, a new historical record.

Moriuchi attributed the across-the-board rise in performance to “not only a favorable market environment, but also years of structural reforms being implemented.”

Nomura’s current remarkable results are also the fruit of its long-term strategic transformation. Under CEO Kentaro Okuda’s leadership, the company has prioritized expanding its equities business, including trading execution services, aiming to reduce reliance on fixed income trading and build more recurring, less market cycle-dependent income streams.

According to the company’s profit growth plan, the wholesale segment aims to increase equities business revenue by another 20% to 30% over the next five years.

In terms of stock performance, Nomura Holdings rose slightly by 0.1% in Tokyo on the day of the earnings report; its shares have gained 21% year-to-date. However, this still lags behind rivals such as Daiwa Securities (DSEEY.US), up 34%, and the strong upward momentum of Japan’s three mega-banks.