Nomura's Bond-Trading Sugar Rush Won't Last
Japan’s largest brokerage should get bolder about cutting costs before the boost from a bumper quarter fades.
Covid has only increased the pressure for Japan’s Nomura.
Photographer: Kiyoshi Ota/BloombergLike its bulge-bracket Wall Street rivals, Nomura Holdings Inc. found volatility was its friend last quarter. The surge in trading revenue that drove a return to profit is unlikely to be sustained, though. Japan’s largest brokerage needs more than tinkering at the margins to drive a post-Covid recovery.
Chief Executive Officer Kentaro Okuda, reporting his first set of quarterly results, can bask for now. Net income more than doubled to 142.5 billion yen ($1.4 billion) in the three months ended June 30, from 55.8 billion yen a year earlier, and rebounding from a loss in the March quarter. Revenue from the firm’s wholesale division, which houses its bond-trading activities, rose to a record. (A one-time gain from revaluation of Tokyo real estate also buoyed earnings.)