Nomura's Q3 profit grows despite investment banking slump

Nomura Holdings Inc, Japan's biggest brokerage and investment bank, reported an 11% rise in quarterly net profit on Wednesday, as a partial stake sale in an affiliate offset a slump in investment banking.

Nomura's wholesale division, which houses its investment banking and trading businesses, logged a pretax loss of 1.9 billion yen ($14.58 million), its first loss since the April-June quarter of 2021.

But a 28-billion-yen gain from the partial sale of its stake in affiliate Nomura Research Institute and a recovery in the valuation of the U.S. asset management unit helped Nomura post a net profit of 66.9 billion yen ($513.51 million) for the October-December period.

The largely dismal results from Nomura come as a global investment banking fee pool more than halved from the same quarter a year earlier, according to data from analytics firm Dealogic, leading to deep job cuts at Wall Street dealmakers.

Even as Nomura's investment banking business was underpinned by relatively solid dealmaking activity in Japan, it confirmed layoffs of bankers in Europe and Asia. Reuters last month reported it had cut 18 Asian banking jobs.

"Although we have a solid amount of deals in the pipeline, they don't get finalised," Chief Financial Officer Takumi Kitamura told reporters.

Kitamura said the company would stick to its strategy of beefing up its investment banking business, however.

"We carried out job cuts in specific areas," Kitamura said, without providing details. "But we will continue to pour our resources in areas that we have competitive strengths, such as the Greentech unit," he said, referring to a merger-and-acquisition adviser in clean technology.

Kitamura said the market could bottom out "as we seem to be gaining more clarity of the pace of the U.S. Federal Reserve' interest rate hikes."

($1 = 130.3400 yen)