6-K 1 d615537d6k.htm FORM 6-K FORM 6-K
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FORM 6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

Commission File Number: 1-15270

For the month of October 2018

NOMURA HOLDINGS, INC.

(Translation of registrant’s name into English)

9-1, Nihonbashi 1-chome

Chuo-ku, Tokyo 103-8645

Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F       X             Form 40-F              

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             

 

 

 

 

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Information furnished on this form:

EXHIBIT

 

Exhibit Number
1.    Financial Summary – Six months ended September 30, 2018

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   NOMURA HOLDINGS, INC.
Date: October 31, 2018    By:  

/s/ Hajime Ikeda

     Hajime Ikeda
     Senior Managing Director

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Financial Summary For the Six Months Ended September 30, 2018 (U.S. GAAP)

 

Date:

    October 31, 2018

Company name (code number):

    Nomura Holdings, Inc. (8604)

Stock exchange listings:

    (In Japan) Tokyo, Nagoya
   (Overseas) New York, Singapore

Representative:

    Koji Nagai
   President and Group CEO, Nomura Holdings, Inc.

For inquiries:

    Junko Tago
   Executive Director, Head of Investor Relations, Nomura Holdings, Inc.
   Tel: (Country Code 81) 3-5255-1000
   URL: https://www.nomura.com

1. Consolidated Operating Results

(1) Operating Results

 

     (Rounded to nearest million)  
     (Millions of yen, except per share data)  
     For the six months ended September 30  
     2017     2018  
           % Change from
September 30, 2016		           % Change from
September 30, 2017		  

Total revenue

      930,315       10.2 %      879,366       (5.5% ) 

Net revenue

      712,316       3.9 %      554,919       (22.1% ) 

Income before income taxes

      160,482       11.0 %      14,110       (91.2% ) 

Net income (loss) attributable to

Nomura Holdings, Inc. (“NHI”) shareholders

      108,706       0.6 %      (6,010 )      —  %  

Comprehensive income

      113,821       —   %      64,405       (43.4% ) 

Basic-Net income (loss) attributable to NHI shareholders per share (Yen)

      30.79         (1.77 )   

Diluted-Net income (loss) attributable to NHI shareholders per share (Yen)

      30.20         (1.78 )   

Return on shareholders’ equity - annualized

      7.7 %        (0.4 %)   

Note: Return on shareholders’ equity is a ratio of Net income (loss) attributable to NHI shareholders to Total NHI shareholders’ equity.

(2) Financial Position

 

     (Millions of yen, except per share data)  
     At March 31     At September 30  
     2018     2018  

Total assets

      40,343,947       45,360,339  

Total equity

      2,799,824       2,846,010  

Total NHI shareholders’ equity

      2,749,320       2,800,777  

Total NHI shareholders’ equity as a percentage of total assets

      6.8 %      6.2 % 

Total NHI shareholders’ equity per share (Yen)

      810.31       828.02  

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2. Cash Dividends

 

                                                                       
     (Yen amounts)  
     For the year ended March 31  
     2018      2019      2019 (Plan)  

Dividends per share

         

Dividends record dates

         

At June 30

      —          —          —    

At September 30

      9.00        3.00        —    

At December 31

      —          —          —    

At March 31

      11.00        —          Unconfirmed  

For the year

      20.00        —          Unconfirmed  

Note: Fiscal year 2019 Q4 dividend amount are not presented per reasons stated in “3. Earnings Forecasts for the year ending March 31, 2019”.

3. Earnings Forecasts for the year ending March 31, 2019

Nomura provides investment, financing and related services in the capital markets on a global basis. In the global capital markets there exist uncertainties due to, but not limited to, economic and market conditions. Nomura, therefore, does not present earnings forecasts.

Notes

(1) Changes in significant subsidiaries during the period: None

      (Changes in Specified Subsidiaries accompanying changes in scope of consolidation.)

(2) Adoption of the simplified and particular accounting treatments: None

(3) Changes in accounting policies

 

  a)

Changes in accounting policies due to amendments to the accounting standards : Yes

  b)

Changes in accounting policies due to other than a) : Yes

(4) Number of shares issued (common stock)

 

     At March 31      At September 30  
     2018      2018  

Number of shares outstanding (including treasury stock)

      3,643,562,601        3,643,562,601  

Number of treasury stock

      250,625,115        261,080,989  
     For the six months ended September 30  
   2017      2018  

Average number of shares outstanding (year-to-date)

      3,530,324,525        3,394,856,369  

*This financial summary is not subject to certified public accountant’s or audit firm’s quarterly review.

Table of Contents

Table of Contents for the Accompanying Materials

 

1.     Qualitative Information of the Quarterly Consolidated Results

      P. 2  

(1)    Consolidated Operating Results

      P. 2  

(2)    Consolidated Financial Position

      P. 4  

(3)    Consolidated Earnings Forecasts

      P. 4  

2.    Notes to the Summary Information

     P. 5  

(1)    Changes in Accounting Policies

      P. 5  

3.    Quarterly Consolidated Financial Statements

      P. 5  

(1)    Consolidated Balance Sheets

      P. 6  

(2)    Consolidated Statements of Income

      P. 8  

(3)    Consolidated Statements of Comprehensive Income

      P. 9  

(4)    Note with respect to the Assumption as a Going Concern

      P. 9  

(5)    Segment Information – Operating Segment

      P.10  

(6)    Significant Changes in Equity

      P.11  

4.    Supplementary Information

      P.12  

(1)    Consolidated Statements of Income – Quarterly Comparatives

      P.12  

(2)    Business Segment Information – Quarterly Comparatives

      P.13  

(3)    Other

      P.14  

 

– 1 –

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1.

Qualitative Information of the Quarterly Consolidated Results

 

(1)

Consolidated Operating Results

U.S. GAAP

 

     Billions of yen     % Change  
   For the six months ended     (B-A)/(A)  
   September 30,
2017 (A)		     September 30,
2018 (B)		  

Net revenue

      712.3       554.9       (22.1 ) 

Non-interest expenses

      551.8       540.8       (2.0 ) 
  

 

 

    

 

 

    

 

 

  

Income before income taxes

      160.5       14.1       (91.2 ) 

Income tax expense

      48.8       16.6       (65.9 ) 
  

 

 

    

 

 

    

 

 

  

Net income (loss)

      111.7       (2.5 )      —    
  

 

 

    

 

 

    

 

 

  

Less: Net income attributable to noncontrolling interests

      2.9       3.5       18.3  
  

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to NHI shareholders

      108.7       (6.0 )      —    
  

 

 

    

 

 

    

 

 

  

Return on shareholders’ equity - annualized

      7.7 %      (0.4 %)      —    
  

 

 

    

 

 

    

 

 

  

 

Note: Return on shareholders’ equity is a ratio of Net income (loss) attributable to NHI shareholders to Total NHI shareholders’ equity.

Nomura Holdings, Inc. and its consolidated entities (collectively, “Nomura”) reported net revenue of 554.9 billion yen for the six months ended September 30, 2018, a decrease of 22.1% from the same period in the prior year. Non-interest expenses decreased by 2.0% from the same period in the prior year to 540.8 billion yen. Income before income taxes was 14.1 billion yen and net loss attributable to NHI shareholders was 6.0 billion yen for the six months ended September 30, 2018.

Segment Information

 

     Billions of yen     % Change  
   For the six months ended     (B-A)/(A)  
   September 30,
2017 (A)		     September 30,
2018 (B)		  

Net revenue

      709.6       554.0       (21.9 ) 

Non-interest expenses

      551.8       540.8       (2.0 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      157.7          13.2           (91.6 ) 
  

 

 

    

 

 

    

 

 

  

In the above segment information totals, which exclude unrealized gain (loss) on investments in equity securities held for operating purposes, net revenue for the six months ended September 30, 2018 was 554.0 billion yen, a decrease of 21.9% from the same period in the prior year. Non-interest expenses decreased by 2.0% from the same period in the prior year to 540.8 billion yen. Income before income taxes was 13.2 billion yen for the six months ended September 30, 2018. Please refer to page 10 for further details of the differences between U.S. GAAP and business segment amounts.

 

– 2 –

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<Business Segment Results>

Operating Results of Retail

 

     Billions of yen     % Change  
     For the six months ended     (B-A)/(A)  
     September 30,
2017 (A)		     September 30,
2018 (B)		  

Net revenue

      203.5             178.5           (12.3 ) 

Non-interest expenses

      153.0       146.4       (4.3 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      50.4       32.1       (36.3 ) 
  

 

 

    

 

 

    

 

 

  

Net revenue decreased by 12.3% from the same period in the prior year to 178.5 billion yen, primarily due to decreasing commissions from distribution of brokerage and investment trusts. Non-interest expense decreased by 4.3% to 146.4 billion yen. As a result, income before income taxes decreased by 36.3% to 32.1 billion yen.

Operating Results of Asset Management

 

     Billions of yen     % Change  
     For the six months ended     (B-A)/(A)  
     September 30,
2017 (A)		     September 30,
2018 (B)		  

Net revenue

        63.5             50.8           (20.1 ) 

Non-interest expenses

      29.5       31.6       7.1  
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      34.0       19.2       (43.6 ) 
  

 

 

    

 

 

    

 

 

  

Net revenue decreased by 20.1% from the same period in the prior year to 50.8 billion yen. Non-interest expense increased by 7.1% to 31.6 billion yen. As a result, income before income taxes decreased by 43.6% to 19.2 billion yen. Assets under management were 52.8 trillion yen as of September 30, 2018.

Operating Results of Wholesale

 

     Billions of yen     % Change  
     For the six months ended     (B-A)/(A)  
     September 30,
2017 (A)		     September 30,
2018 (B)		  

Net revenue

      338.3           284.9           (15.8 ) 

Non-interest expenses

      295.9       287.5       (2.9 ) 
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      42.3       (2.5 )      —    
  

 

 

    

 

 

    

 

 

  

Net revenue decreased by 15.8% from the same period in the prior year to 284.9 billion yen. Non-interest expense decreased by 2.9% to 287.5 billion yen. As a result, loss before income taxes was 2.5 billion yen.

 

– 3 –

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Other Operating Results

 

     Billions of yen     % Change  
     For the six months ended     (B-A)/(A)  
     September 30,
2017 (A)		     September 30,
2018 (B)		  

Net revenue

          104.3               39.7           (61.9 ) 

Non-interest expenses

      73.4       75.4       2.7  
  

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      30.9       (35.7 )      —    
  

 

 

    

 

 

    

 

 

  

Net revenue was 39.7 billion yen. Loss before income taxes was 35.7 billion yen.

 

(2)

Consolidated Financial Position

Total assets as of September 30, 2018 were 45,360.3 billion yen, an increase of 5,016.4 billion yen compared to March 31, 2018, mainly due to the increase in Securities purchased under agreements to resell. Total liabilities as of September 30, 2018 were 42,514.3 billion yen, an increase of 4,970.2 billion yen compared to March 31, 2018, mainly due to the increase in Securities sold under agreements to repurchase. Total equity as of September 30, 2018 was 2,846.0 billion yen, an increase of 46.2 billion yen compared to March 31, 2018.

 

(3)

Consolidated Earnings Forecasts

Nomura provides investment, financing and related services in the capital markets on a global basis. In the global capital markets there exist uncertainties due to, but not limited to, economic and market conditions. Nomura, therefore, does not present earnings and dividend forecasts.

 

– 4 –

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2.

Notes to the Summary Information

 

(1)

Changes in Accounting Policies

Revenue recognition

On April 1, 2018, Nomura adopted Accounting Standards Update 2014-09 “Revenue from Contracts with Customers” and replaced existing revenue recognition guidance with a new prescriptive model. As a result of this adoption based on the modified retrospective application, the beginning balance of Retained earnings has been adjusted.

Changes of offsetting of derivatives

Nomura collects and remits cash margin between its clients and central clearing houses in its execution and clearing services of exchange-traded derivative transactions. Cash margin collected from clients and remitted to central clearing houses was reflected on Nomura’s consolidated balance sheets. However, with effect from April 1, 2018, revisiting nature of the transactions, Nomura has revised its accounting policy for when such balances are recognized on Nomura’s consolidated group balance sheet and as a result, certain cash margin amounts held on behalf of clients as well as an equivalent amount reflecting the obligation to return such amounts to clients are no longer recognized on the balance sheet if certain criteria are met. Nomura has restated previously reported amounts of Receivables from other than customers decreased by 237.0 billion yen and Payables to other than customers decreased by 237.0 billion yen, respectively, to conform to the current presentation.

Daily variation margin for certain derivative transactions traded in Japan was reflected on Nomura’s consolidated balance sheets. However, from April 1, 2018, Nomura changed its accounting policy as a result of amendment of the rules of a specific central clearing house and daily variation margin is now off-balanced. Nomura has restated previously report amounts of Trading assets decreased by 4.9 billion yen, Receivables from other than customers decreased by 5.5 billion yen and Trading liabilities decreased by 10.4 billion yen respectively to conform to the current presentation.

 

3.

Quarterly Consolidated Financial Statements

The quarterly consolidated financial information herein has been prepared in accordance with Nomura’s accounting policies which are disclosed in the notes to the consolidated financial statements of Nomura Holdings, Inc.’s Annual Securities Report (the annual report filed in Japan on June 25, 2018) and Form 20-F (the annual report filed with the U.S. Securities and Exchange Commission on June 25, 2018) for the year ended March 31, 2018.

 

– 5 –

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(1)

Consolidated Balance Sheets

 

     Millions of yen  
     March 31,
2018		     September 30,
2018		     Increase/
(Decrease)		  
ASSETS       

Cash and cash deposits:

       

Cash and cash equivalents

      2,354,639       2,975,414       620,775  

Time deposits

      315,445       194,827       (120,618 ) 

Deposits with stock exchanges and other segregated cash

      288,962       294,180       5,218  
  

 

 

    

 

 

    

 

 

  

Total cash and cash deposits

      2,959,046       3,464,421       505,375  
  

 

 

    

 

 

    

 

 

  

Loans and receivables:

       

Loans receivable

      2,462,503       2,308,099       (154,404 ) 

Receivables from customers

      442,343       600,758       158,415  

Receivables from other than customers

      973,867       677,956       (295,911 ) 

Allowance for doubtful accounts

      (3,514 )      (3,964 )      (450 ) 
  

 

 

    

 

 

    

 

 

  

Total loans and receivables

      3,875,199       3,582,849       (292,350 ) 
  

 

 

    

 

 

    

 

 

  

Collateralized agreements:

       

Securities purchased under agreements to resell

      9,853,898       15,412,852       5,558,954  

Securities borrowed

      6,383,845       4,509,602       (1,874,243 ) 
  

 

 

    

 

 

    

 

 

  

Total collateralized agreements

      16,237,743       19,922,454       3,684,711  
  

 

 

    

 

 

    

 

 

  

Trading assets and private equity investments:

       

Trading assets*

      14,962,690       16,084,405       1,121,715  

Private equity investments

      17,466       18,055       589  
  

 

 

    

 

 

    

 

 

  

Total trading assets and private equity investments

      14,980,156       16,102,460       1,122,304  
  

 

 

    

 

 

    

 

 

  

Other assets:

       

Office buildings, land, equipment and facilities

(net of accumulated depreciation and amortization of
¥397,834 million as of March 31, 2018 and
¥423,552 million as of September 30, 2018)

      338,984       323,938       (15,046 ) 

Non-trading debt securities*

      485,891       451,875       (34,016 ) 

Investments in equity securities*

      150,760       150,820       60  

Investments in and advances to affiliated companies*

      408,034       418,330       10,296  

Other

      908,134       943,192       35,058  
  

 

 

    

 

 

    

 

 

  

Total other assets

      2,291,803       2,288,155       (3,648 ) 
  

 

 

    

 

 

    

 

 

  

Total assets

      40,343,947       45,360,339       5,016,392  
  

 

 

    

 

 

    

 

 

  

 

* 

Including securities pledged as collateral

 

– 6 –

Table of Contents
     Millions of yen  
     March 31,
2018		     September 30,
2018		     Increase/
(Decrease)		  
LIABILITIES AND EQUITY       

Short-term borrowings

      743,497       980,269       236,772  

Payables and deposits:

       

Payables to customers

      1,176,773       1,318,876       142,103  

Payables to other than customers

      1,239,540       1,422,757       183,217  

Deposits received at banks

      1,151,342       1,182,640       31,298  
      

 

 

    

 

 

    

 

 

  

Total payables and deposits

        3,567,655         3,924,273       356,618  
  

 

 

    

 

 

    

 

 

  

Collateralized financing:

       

Securities sold under agreements to repurchase

      14,759,010       18,645,764       3,886,754  

Securities loaned

      1,524,363       1,371,260       (153,103 ) 

Other secured borrowings

      413,621       420,362       6,741  
  

 

 

    

 

 

    

 

 

  

Total collateralized financing

      16,696,994       20,437,386       3,740,392  
  

 

 

    

 

 

    

 

 

  

Trading liabilities

      8,202,936       8,600,314       397,378  

Other liabilities

      950,534       877,846       (72,688 ) 

Long-term borrowings

      7,382,507       7,694,241       311,734  
  

 

 

    

 

 

    

 

 

  

Total liabilities

      37,544,123       42,514,329       4,970,206  
  

 

 

    

 

 

    

 

 

  

Equity

       

NHI shareholders’ equity:

       

  Common stock

       

Authorized

     -    6,000,000,000 shares       

Issued

     -  

 3,643,562,601 shares as of March 31, 2018 and

 3,643,562,601 shares as of September 30, 2018

       

Outstanding

     -  

 3,392,937,486 shares as of March 31, 2018 and

 3,382,481,612 shares as of September 30, 2018

      594,493       594,493       —    

Additional paid-in capital

      675,280       681,058       5,778  

Retained earnings

      1,696,890       1,681,445       (15,445 ) 

Accumulated other comprehensive income (loss)

      (59,356 )      6,373       65,729  
      

 

 

    

 

 

    

 

 

  

Total NHI shareholders’ equity before treasury stock

      2,907,307       2,963,369       56,062  

Common stock held in treasury, at cost -

       

250,625,115 shares as of March 31, 2018 and

       

261,080,989 shares as of September 30, 2018

      (157,987 )      (162,592 )      (4,605 ) 
  

 

 

    

 

 

    

 

 

  

Total NHI shareholders’ equity

      2,749,320       2,800,777       51,457  
  

 

 

    

 

 

    

 

 

  

Noncontrolling interests

      50,504       45,233       (5,271 ) 
  

 

 

    

 

 

    

 

 

  

Total equity

      2,799,824       2,846,010       46,186  
  

 

 

    

 

 

    

 

 

  

Total liabilities and equity

      40,343,947       45,360,339       5,016,392  
  

 

 

    

 

 

    

 

 

  

 

– 7 –

Table of Contents
(2)

Consolidated Statements of Income

 

     Millions of yen     % Change  
     For the six months ended     (B-A)/(A)  
     September 30,
2017(A)		      September 30,
2018(B)		  

Revenue:

        

Commissions

      176,292        154,239       (12.5 ) 

Fees from investment banking

      49,790        43,078       (13.5 ) 

Asset management and portfolio service fees

      119,555        125,721       5.2  

Net gain on trading

      208,858        147,639       (29.3 ) 

Gain on private equity investments

      29        874       —    

Interest and dividends

      276,004        358,293         29.8  

Gain on investments in equity securities

      3,122        988       (68.4 ) 

Other

      96,665        48,534       (49.8 ) 
  

 

 

     

 

 

    

 

 

  

Total revenue

      930,315        879,366       (5.5 ) 

Interest expense

      217,999        324,447       48.8  
  

 

 

     

 

 

    

 

 

  

Net revenue

      712,316         554,919        (22.1 ) 
  

 

 

     

 

 

    

 

 

  

Non-interest expenses:

        

Compensation and benefits

      258,284        253,500       (1.9 ) 

Commissions and floor brokerage

      49,017        40,514       (17.3 ) 

Information processing and communications

      91,832        81,476       (11.3 ) 

Occupancy and related depreciation

      34,265        32,840       (4.2 ) 

Business development expenses

      16,232        18,233       12.3  

Other

      102,204        114,246       11.8  
  

 

 

     

 

 

    

 

 

  

Total non-interest expenses

      551,834        540,809       (2.0 ) 
  

 

 

     

 

 

    

 

 

  

Income before income taxes

      160,482        14,110       (91.2 ) 

Income tax expense

      48,828        16,633       (65.9 ) 
  

 

 

     

 

 

    

 

 

  

Net income (loss)

      111,654        (2,523 )      —    
  

 

 

     

 

 

    

 

 

  

Less: Net income attributable to noncontrolling interests

      2,948        3,487       18.3  
  

 

 

     

 

 

    

 

 

  

Net income (loss) attributable to NHI shareholders

      108,706        (6,010 )      —    
  

 

 

     

 

 

    

 

 

  

Per share of common stock:

        
     Yen     % Change  

Basic-

        

Net income (loss) attributable to NHI shareholders per share

      30.79        (1.77 )      —    
  

 

 

     

 

 

    

 

 

  

Diluted-

        

Net income (loss) attributable to NHI shareholders per share

      30.20        (1.78 )      —    
  

 

 

     

 

 

    

 

 

  

 

– 8 –

Table of Contents
(3)

Consolidated Statements of Comprehensive Income

 

     Millions of yen     % Change  
   For the six months ended     (B-A)/(A)  
   September 30,
2017(A)		     September 30,
2018(B)		  

Net income (loss)

        111,654       (2,523 )      —    

Other comprehensive income (loss):

       

Cumulative translation adjustments:

       

Cumulative translation adjustments

      10,636       64,297       504.5  

Deferred income taxes

      (801 )      (1,966 )      —    
  

 

 

    

 

 

    

 

 

  

Total

      9,835       62,331       533.8  
  

 

 

    

 

 

    

 

 

  

Defined benefit pension plans:

       

Pension liability adjustment

      381       2,064       441.7  

Deferred income taxes

      (18 )      (807 )      —    
  

 

 

    

 

 

    

 

 

  

Total

      363       1,257       246.3  
  

 

 

    

 

 

    

 

 

  

Non-trading securities:

       

Net unrealized gain (loss) on non-trading securities

      1,487       —         (100.0 ) 

Deferred income taxes

      (179 )      —         —    
  

 

 

    

 

 

    

 

 

  

Total

      1,308       —         (100.0 ) 
  

 

 

    

 

 

    

 

 

  

Own Credit Adjustments:

       

Own Credit Adjustments:

      (10,670 )      4,720       —    

Deferred income taxes

      1,331       (1,380 )      —    
  

 

 

    

 

 

    

 

 

  

Total

      (9,339 )      3,340       —    
  

 

 

    

 

 

    

 

 

  

Total other comprehensive income (loss)

      2,167       66,928       —    
  

 

 

    

 

 

    

 

 

  

Comprehensive income

      113,821         64,405       (43.4 ) 

Less: Comprehensive income attributable to noncontrolling interests

      3,182       4,686       47.3  
  

 

 

    

 

 

    

 

 

  

Comprehensive income attributable to NHI shareholders

      110,639       59,719       (46.0 ) 
  

 

 

    

 

 

    

 

 

  

 

(4)

Note with respect to the Assumption as a Going Concern

Not applicable.

 

– 9 –

Table of Contents
(5)

Segment Information – Operating Segment

The following table shows business segment information and reconciliation items to the consolidated statements of income.

 

     Millions of yen     % Change  
     For the six months ended     (B-A)/(A)  
     September 30,
2017 (A)		      September 30,
2018 (B)		  

Net revenue

        

Business segment information:

        

Retail

        203,470        178,543       (12.3 ) 

Asset Management

      63,515        50,770       (20.1 ) 

Wholesale

      338,279        284,950       (15.8 ) 
  

 

 

     

 

 

    

 

 

  

Subtotal

      605,264        514,263       (15.0 ) 

Other

      104,317        39,720       (61.9 ) 
  

 

 

     

 

 

    

 

 

  

Net revenue

      709,581        553,983       (21.9 ) 
  

 

 

     

 

 

    

 

 

  

Reconciliation items:

        

Unrealized gain (loss) on investments in equity securities held for operating purposes

      2,735        936       (65.8 ) 
  

 

 

     

 

 

    

 

 

  

Net revenue

      712,316        554,919       (22.1 ) 
  

 

 

     

 

 

    

 

 

  

Non-interest expenses

        

Business segment information:

        

Retail

      153,031        146,403       (4.3 ) 

Asset Management

      29,477        31,574           7.1  

Wholesale

      295,943        287,459       (2.9 ) 
  

 

 

     

 

 

    

 

 

  

Subtotal

      478,451        465,436       (2.7 ) 

Other

      73,383        75,373       2.7  
  

 

 

     

 

 

    

 

 

  

Non-interest expenses

      551,834        540,809       (2.0 ) 
  

 

 

     

 

 

    

 

 

  

Reconciliation items:

        

Unrealized gain (loss) on investments in equity securities held for operating purposes

      —          —         —    
  

 

 

     

 

 

    

 

 

  

Non-interest expenses

      551,834        540,809       (2.0 ) 
  

 

 

     

 

 

    

 

 

  

Income (loss) before income taxes

        

Business segment information:

        

Retail

      50,439        32,140       (36.3 ) 

Asset Management

      34,038        19,196       (43.6 ) 

Wholesale

      42,336        (2,509 )      —    
  

 

 

     

 

 

    

 

 

  

Subtotal

      126,813        48,827       (61.5 ) 

Other*

      30,934        (35,653 )      —    
  

 

 

     

 

 

    

 

 

  

Income (loss) before income taxes

      157,747        13,174       (91.6 ) 
  

 

 

     

 

 

    

 

 

  

Reconciliation items:

        

Unrealized gain (loss) on investments in equity securities held for operating purposes

      2,735        936       (65.8 ) 
  

 

 

     

 

 

    

 

 

  

Income (loss) before income taxes

      160,482        14,110       (91.2 ) 
  

 

 

     

 

 

    

 

 

  

 

*

Major components

Transactions between operating segments are recorded within segment results on commercial terms and conditions, and are eliminated in “Other.”

The following table presents the major components of income (loss) before income taxes in “Other.”

 

     Millions of yen     % Change  
     For the six months ended        
     September 30,
2017 (A)		     September 30,
2018 (B)		     (B-A)/(A)  

Net gain (loss) related to economic hedging transactions

      (96 )      (29,825 )      —    

Realized gain (loss) on investments in equity securities held for operating purposes

      387       52       (86.6 ) 

Equity in earnings of affiliates

        15,430         15,155       (1.8 ) 

Corporate items

      1,751       (26,201 )      —    

Other

      13,462       5,166       (61.6 ) 
  

 

 

    

 

 

    

 

 

  

Total

      30,934       (35,653 )      —    
  

 

 

    

 

 

    

 

 

  

 

– 10 –

Table of Contents
(6)

Significant Changes in Equity

Not applicable. For further details of the changes, please refer below.

 

     Millions of yen  
     For the six months ended
September 30, 2018		  

Common stock

   

Balance at beginning of year

      594,493  
  

 

 

  

Balance at end of period

      594,493  
  

 

 

  

Additional paid-in capital

   

Balance at beginning of year

      675,280  

Stock-based compensation awards

      5,778  
  

 

 

  

Balance at end of period

      681,058  
  

 

 

  

Retained earnings

   

Balance at beginning of year

      1,696,890  

Cumulative effect of change in accounting principle(1)

      1,564  

Net income (loss) attributable to NHI shareholders

      (6,009 ) 

Cash dividends

      (10,147 ) 

Gain (loss) on sales of treasury stock

      (853 ) 
  

 

 

  

Balance at end of period

      1,681,445  
  

 

 

  

Accumulated other comprehensive income (loss)

   

Cumulative translation adjustments

   

Balance at beginning of year

      (15,596 ) 

Net change during the period

      61,132  
  

 

 

  

Balance at end of period

      45,536  
  

 

 

  

Defined benefit pension plans

   

Balance at beginning of year

      (47,837 ) 

Pension liability adjustment

      1,257  
  

 

 

  

Balance at end of period

      (46,580 ) 
  

 

 

  

Own credit adjustments

   

Balance at beginning of year

      4,077  

Own credit adjustments

      3,340  
  

 

 

  

Balance at end of period

      7,417  
  

 

 

  

Balance at end of period

      6,373  
  

 

 

  

Common stock held in treasury

   

Balance at beginning of year

      (157,987 ) 

Repurchases of common stock

      (9,933 ) 

Sale of common stock

      0  

Common stock issued to employees

      5,328  
  

 

 

  

Balance at end of period

      (162,592 ) 
  

 

 

  

Total NHI shareholders’ equity

   
  

 

 

  

Balance at end of period

      2,800,777  
  

 

 

  

Noncontrolling interests

   

Balance at beginning of year

      50,504  

Net change during the period

      (5,271 ) 
  

 

 

  

Balance at end of period

      45,233  
  

 

 

  

Total equity

   
  

 

 

  

Balance at end of period

      2,846,010  
  

 

 

  

 

(1)

In relation to Cumulative effect of change in accounting principle, please refer to section “2. Notes to the Summary Information (1) Changes in Accounting Policies.”

 

– 11 –

Table of Contents
4.

Supplementary Information

 

(1)

Consolidated Statements of Income – Quarterly Comparatives

 

    Millions of yen     % Change     Millions of yen  
    For the three months ended     (B-A)/(A)     For the year ended
March 31,
2018		  
    June 30,
2017		     September 30,
2017		     December 31,
2017		     March 31,
2018		     June 30,
2018(A)		     September 30,
2018(B)		  

Revenue:

                

Commissions

     90,968       85,324       101,655       95,366       79,456       74,783       (5.9 )      373,313  

Fees from investment banking

     22,707       27,083       29,289       22,584       23,959       19,119       (20.2 )      101,663  

Asset management and portfolio service fees

     58,343       61,212       63,767       62,294       62,981       62,740       (0.4 )      245,616  

Net gain on trading

     120,467       88,391       87,725       146,302       71,887       75,752       5.4       442,885  

Gain (loss) on private equity investments

     359       (330 )      (2,381 )      1,483       553       321       (42.0 )      (869 ) 

Interest and dividends

     134,392       141,612       161,445       148,226       169,590       188,703       11.3       585,675  

Gain (loss) on investments in equity securities

     62       3,060       4,532       (4,971 )      2,092       (1,104 )      —         2,683  

Other

     40,628       56,037       84,597       39,930       20,467       28,067       37.1       221,192  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenue

     467,926       462,389       530,629       511,214       430,985       448,381       4.0       1,972,158  

Interest expense

     107,103       110,896       124,013       133,177       158,988       165,459       4.1       475,189  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net revenue

     360,823       351,493       406,616       378,037       271,997       282,922       4.0       1,496,969  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-interest expenses:

                

Compensation and benefits

     136,249       122,035       131,372       140,985       127,700       125,800       (1.5 )      530,641  

Commissions and floor brokerage

     23,775       25,242       25,252       25,599       20,935       19,579       (6.5 )      99,868  

Information processing and communications

     44,569       47,263       49,049       43,900       40,961       40,515       (1.1 )      184,781  

Occupancy and related depreciation

     17,056       17,209       16,805       16,825       16,376       16,464       0.5       67,895  

Business development expenses

     8,409       7,823       9,801       10,729       8,896       9,337       5.0       36,762  

Other

     53,322       48,882       53,584       93,076       43,486       70,760       62.7       248,864  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total non-interest expenses

     283,380       268,454       285,863       331,114       258,354       282,455       9.3       1,168,811  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes

     77,443       83,039       120,753       46,923       13,643       467       (96.6 )      328,158  

Income tax expense

     19,405       29,423       30,960       24,078       6,930       9,703       40.0       103,866  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss)

     58,038       53,616       89,793       22,845       6,713       (9,236 )      —         224,292  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Less: Net income attributable to noncontrolling interests

     1,182       1,766       1,831       170       1,490       1,997       34.0       4,949  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to NHI shareholders

     56,856       51,850       87,962       22,675       5,223       (11,233 )      —         219,343  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    Yen     % Change     Yen  

Per share of common stock:

  

Basic-

                

Net income (loss) attributable to NHI shareholders per share

     16.07       14.70       25.55       6.68       1.54       (3.31 )      —         63.13  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Diluted-

                

Net income (loss) attributable to NHI shareholders per share

     15.77       14.45       25.12       6.56       1.50       (3.32 )      —         61.88  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

– 12 –

Table of Contents
(2)

Business Segment Information – Quarterly Comparatives

The following table shows quarterly business segment information and reconciliation items to the consolidated statements of income.

 

     Millions of yen     % Change     Millions of yen  
     For the three months ended           For the year ended  
     June 30,
2017		     September 30,
2017		      December 31,
2017		     March 31,
2018		     June 30,
2018(A)		     September 30,
2018(B)		     (B-A)/(A)     March 31,
2018		  

Net revenue

                  

Business segment information:

                  

Retail

      101,684       101,786        111,284       98,154       92,833       85,710       (7.7 )      412,908   

Asset Management

      28,097       35,418        36,503       27,319       26,089       24,681       (5.4 )      127,337  

Wholesale

      179,316       158,963        165,648       211,406       137,290       147,660       7.6       715,333  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Subtotal

      309,097       296,167        313,435       336,879       256,212       258,051       0.7       1,255,578  

Other

      51,707       52,610        89,023       46,153       13,738       25,982       89.1        239,493  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net revenue

      360,804       348,777        402,458       383,032       269,950       284,033       5.2       1,495,071  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation items:

                  

Unrealized gain (loss) on investments in equity securities held for operating purposes

      19        2,716        4,158        (4,995 )      2,047       (1,111 )      —         1,898  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net revenue

      360,823       351,493        406,616       378,037       271,997       282,922       4.0       1,496,969  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-interest expenses

                  

Business segment information:

                  

Retail

      76,792       76,239        79,997       76,743       72,909       73,494       0.8       309,771  

Asset Management

      14,527       14,950        15,671       16,019       15,806       15,768       (0.2 )      61,167  

Wholesale

      153,963       141,980        151,602       167,200       144,714       142,745       (1.4 )      614,745  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Subtotal

      245,282       233,169        247,270       259,962       233,429       232,007       (0.6 )      985,683  

Other

      38,098       35,285        38,593       71,152       24,925       50,448       102.4       183,128  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-interest expenses

      283,380       268,454        285,863       331,114       258,354       282,455       9.3       1,168,811  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation items:

                  

Unrealized gain (loss) on investments in equity securities held for operating purposes

      —         —          —         —         —         —         —         —    
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Non-interest expenses

      283,380       268,454        285,863       331,114       258,354       282,455       9.3       1,168,811  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

                  

Business segment information:

                  

Retail

      24,892       25,547        31,287       21,411       19,924       12,216       (38.7 )      103,137  

Asset Management

      13,570       20,468        20,832       11,300       10,283       8,913       (13.3 )      66,170  

Wholesale

      25,353       16,983        14,046       44,206       (7,424 )      4,915       —         100,588  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Subtotal

      63,815       62,998        66,165       76,917       22,783       26,044       14.3       269,895  

Other*

      13,609       17,325        50,430       (24,999 )      (11,187 )      (24,466 )      —         56,365  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      77,424       80,323        116,595       51,918       11,596       1,578       (86.4 )      326,260  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Reconciliation items:

                  

Unrealized gain (loss) on investments in equity

securities held for operating purposes

      19       2,716        4,158       (4,995 )      2,047       (1,111 )      —         1,898  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      77,443       83,039        120,753       46,923       13,643       467       (96.6 )      328,158  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

*

Major components

Transactions between operating segments are recorded within segment results on commercial terms and conditions, and are eliminated in “Other.”

The following table presents the major components of income (loss) before income taxes in “Other.”

 

     Millions of yen     % Change     Millions of yen  
     For the three months ended           For the year ended  
     June 30,
2017		     September 30,
2017		      December 31,
2017		     March 31,
2018		     June 30,
2018(A)		     September 30,
2018(B)		     (B-A)/(A)     March 31,
2018		  

Net gain (loss) related to economic hedging transactions

      (654 )      558        (8,019 )      1,654       (13,807 )      (16,018 )      —         (6,461 ) 

Realized gain (loss) on investments in equity securities held for operating purposes

      43       344        374       24       45       7       (84.4 )      785  

Equity in earnings of affiliates

      7,022       8,408        7,801         11,017           6,619       8,536         29.0            34,248  

Corporate items

      154       1,597        (3,386 )      (40,249 )      (2,482 )      (23,719 )      —         (41,884 ) 

Other

      7,044           6,418          53,660       2,555       (1,562 )          6,728       —         69,677  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

        13,609       17,325        50,430       (24,999 )      (11,187 )      (24,466 )      —         56,365  
  

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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Table of Contents
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Other

Quarterly financial information for Nomura Securities Co., Ltd. can be found at the following URL.

https://www.nomuraholdings.com/company/group/nsc/pdf/2019_2q.pdf

 

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