Affiliated companies and other equity-method investees

12 Months Ended

Mar. 31, 2020

Affiliated Companies and Other Equity-method Investees [Abstract]

Affiliated companies and other equity-method investees

20. Affiliated companies and other equity-method investees:

Nomura’s significant affiliated companies and other equity-method investees include Nomura Research Institute, Ltd. (“NRI”) and Nomura Real Estate Holdings, Inc. (“NREH”).

JAFCO

JAFCO Co. Ltd. (“JAFCO”), which is a listed company in Japan, manages various venture capital funds and provides private equity-related investment services to portfolio companies. Nomura accounted for JAFCO using the equity method because Nomura had the ability to exercise significant influence over operating and financial decisions of JAFCO.

On July 28, 2017, Nomura disposed of its entire shareholding of 8,488,200 shares of JAFCO as part of a share buy-back program by the company. As a result, JAFCO is no longer an equity-method affiliate of Nomura.

NRI

NRI develops and manages computer systems and provides research services and management consulting services. One of the major clients of NRI is Nomura.

Nomura has tendered to the self-tender offer made by NRI. Upon the settlement on August 21, 2019, Nomura has sold 101,889,300 ordinary shares it held at ¥159,966 million to NRI. NRI remains an equity method affiliate of NHI. As a result of the transaction, a gain of ¥73,293 million was recognized in earnings within Revenue—Other during the year ending March 31, 2020.

As of March 31, 2020, Nomura’s ownership of NRI was 28.8% and the remaining balance of equity method goodwill included in the carrying value of the investment was ¥61,310 million.

NREH

NREH is the holding company of the Nomura Real Estate Group which is primarily involved in the residential property development, leasing, investment management as well as other real estate-related activities.

As of March 31, 2020, Nomura’s ownership of NREH was 35.9% and the remaining balance of equity method goodwill included in the carrying value of the investment was ¥11,012 million. 

As a result of significant declines in global equity markets during the fourth quarter due to the COVID-19 pandemic, we assessed and concluded no other-than-temporary impairment losses were required to be recognized.

Summary financial information—

The following tables present summarized financial information for significant affiliated companies of Nomura (including those elected for the fair value option) as of March 31, 2019 and 2020, and for the years ended March 31, 2018, 2019 and 2020.

	Millions of yen
	March 31
	2019		2020
Total assets	¥	2,535,825	¥	2,559,985
Total liabilities		1,538,231		1,669,132

	Millions of yen
	Year ended March 31
	2018(1)		2019		2020
Net revenues	¥	949,055	¥	963,824	¥	1,017,860
Non-interest expenses		768,419		794,264		791,403
Net income attributable to the companies		122,623		122,440		155,567

(1) For JAFCO, financial information while it was an affiliated company of Nomura is included.

The following tables present a summary of balances and transactions with affiliated companies and other equity-method investees as of March 31, 2019 and 2020, and for the years ended March 31, 2018, 2019 and 2020.

	Millions of yen
	March 31
	2019		2020
Investments in affiliated companies	¥	436,220	¥	367,641
Other receivables from affiliated companies(1)		1,425		25,074
Other payables to affiliated companies(1)		2,998		27,648

(1) As a result of adopting ASU 2016-02 as of April 1, 2019, ROU assets and operating lease liabilities are included by ¥23,733mil respectively.

	Millions of yen
	Year ended March 31
	2018		2019		2020
Revenues	¥	1,677	¥	1,986	¥	3,833
Non-interest expenses		46,632		44,073		46,335
Purchase of software, securities and tangible assets		26,830		13,515		17,716

The following table presents the aggregate carrying amount and fair value of investments in affiliated companies and other equity-method investees for which a quoted market price is available as of March 31, 2019 and 2020.

	Millions of yen
	March 31
	2019		2020
Carrying amount	¥	423,885	¥	357,751
Fair value		600,132		511,667

The following table presents equity in earnings of equity-method investees, including those above and dividends from equity-method investees for the years ended March 31, 2018, 2019 and 2020.

	Millions of yen
	Year ended March 31
	2018		2019		2020
Equity in earnings of equity-method investees(1)	¥	34,516	¥	32,014	¥	32,109
Dividends from equity-method investees		13,290		12,971		11,767

(1) Equity in earnings of equity-method investees is reported within Revenue-Other in the consolidated statements of income.