6-K 1 d93296d6k.htm FORM 6-K FORM 6-K
Table of Contents

 

 

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 July 2020

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):             

 

 

 

 


Table of Contents

Information furnished on this form:

EXHIBIT

 

Exhibit Number

1.

   Financial Summary – Three months ended June 30, 2020.


Table of Contents

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: July 29, 2020    By:  

/s/ Go Sugiyama

     Go Sugiyama
     Senior Managing Director


Table of Contents

Financial Summary For the Three Months Ended June 30, 2020 (U.S. GAAP)

 

Date:    July 29, 2020
Company name (code number):    Nomura Holdings, Inc. (8604)
Stock exchange listings:   

(In Japan) Tokyo, Nagoya

(Overseas) New York, Singapore

Representative:   

Kentaro Okuda

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 three months ended June 30  
     2019     2020  
           % Change from
  June  30, 2018  
         

% Change from

  June 30, 2019  

 

Total revenue

     511,379       18.7     514,049       0.5

Net revenue

     332,001       22.1     460,747       38.8

Income before income taxes

     74,806       448.3     181,811       143.0

Net income attributable to Nomura Holdings, Inc. (“NHI”) shareholders

     55,833       969.0     142,516       155.3

Comprehensive income

     24,625       (44.4 %)      145,005       488.9

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

     16.83         46.77    

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

     16.48         45.65    

Return on shareholders’ equity-annualized

     8.4       21.0  

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

(2) Financial Position

 

     (Millions of yen, except per share data)  
     At March 31     At June 30  
     2020     2020  

Total assets

     43,999,815       41,545,394  

Total equity

     2,731,264       2,830,643  

Total NHI shareholders’ equity

     2,653,467       2,779,503  

Total NHI shareholders’ equity as a percentage of total assets

     6.0     6.7

Total NHI shareholders’ equity per share (Yen)

     873.26       909.52  


Table of Contents

2. Cash Dividends

 

                                                                       
                   (Yen amounts)  
     For the year ended March 31  
     2020      2021      2021 (Plan)  

Dividends per share

        

Dividends record dates

        

At June 30

     —          —          —    

At September 30

     15.00        —          Unconfirmed  

At December 31

     —          —          —    

At March 31

     5.00        —          Unconfirmed  

For the year

     20.00        —          Unconfirmed  

Note: Fiscal year 2021 Q2 and Q4 dividends are not presented per reasons stated in “3. Earnings forecasts for the year ending March 31, 2021”.

3. Earnings Forecasts for the year ending March 31, 2021

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) : None

(4) Number of shares issued (common stock)

 

     At March 31      At June 30  
   2020      2020  

Number of shares outstanding (including treasury stock)

     3,493,562,601        3,493,562,601  

Number of treasury stock

     454,975,108        437,566,092  
     For the three months ended June 30  
   2019      2020  

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

     3,317,794,746        3,047,302,930  

*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  

(4)    Risks related to the COVID-19 pandemic

     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. 8  

(2)    Consolidated Statements of Income

     P.10  

(3)    Consolidated Statements of Comprehensive Income

     P.11  

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

     P.11  

(5)    Segment Information – Operating Segment

     P.12  

(6)    Significant Changes in Equity

     P.13  

4.    Supplementary Information

     P.14  

(1)    Consolidated Statements of Income – Quarterly Comparatives

     P.14  

(2)    Business Segment Information – Quarterly Comparatives

     P.15  

(3)    Other

     P.16  

 

– 1 –


Table of Contents
1.

Qualitative Information of the Quarterly Consolidated Results

 

(1)

Consolidated Operating Results

U.S. GAAP

 

     Billions of yen     % Change  
   For the three months ended     (B-A)/(A)  
   June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

     332.0            460.7            38.8    

Non-interest expenses

     257.2       278.9       8.5  
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     74.8       181.8       143.0  

Income tax expense

     17.9       37.5       109.4  
  

 

 

   

 

 

   

 

 

 

Net income (loss)

     56.9       144.3       153.6  
  

 

 

   

 

 

   

 

 

 

Less: Net income (loss) attributable to noncontrolling interests

     1.1       1.8       68.8  
  

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to NHI shareholders

     55.8       142.5       155.3  
  

 

 

   

 

 

   

 

 

 

Return on shareholders’ equity-annualized

     8.4     21.0     —    
  

 

 

   

 

 

   

 

 

 

 

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 460.7 billion yen for the three months ended June 30, 2020, an increase of 38.8% from the same period in the prior year. Non-interest expenses increased by 8.5% from the same period in the prior year to 278.9 billion yen. Income before income taxes was 181.8 billion yen and net income attributable to NHI shareholders was 142.5 billion yen for the three months ended June 30, 2020.

Segment Information

 

     Billions of yen     % Change  
     For the three months ended     (B-A)/(A)  
     June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

     334.9            458.4            36.9    

Non-interest expenses

     257.2       278.9       8.5  
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     77.7       179.5       131.0  
  

 

 

   

 

 

   

 

 

 

In the above segment information totals, which exclude a part of unrealized gain (loss) on investments in equity securities held for operating purposes, net revenue for the three months ended June 30, 2020 was 458.4 billion yen, an increase of 36.9% from the same period in the prior year. Non-interest expenses increased by 8.5% from the same period in the prior year to 278.9 billion yen. Income before income taxes was 179.5 billion yen for the three months ended June 30, 2020. Please refer to page 12 for further details of the differences between U.S. GAAP and business segment amounts.

 

– 2 –


Table of Contents

<Business Segment Results>

Operating Results of Retail

 

     Billions of yen     % Change  
   For the three months ended     (B-A)/(A)  
   June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

       80.6              81.1            0.5  

Non-interest expenses

     72.5       66.0           (9.0
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     8.1       15.1       85.6  
  

 

 

   

 

 

   

 

 

 

Net revenue increased by 0.5% from the same period in the prior year to 81.1 billion yen, primarily due to an increase in commissions received from distribution of brokerage and investment trusts. Non-interest expense decreased by 9.0% to 66.0 billion yen. As a result, income before income taxes increased by 85.6% to 15.1 billion yen.

Operating Results of Asset Management

 

     Billions of yen     % Change  
   For the three months ended     (B-A)/(A)  
   June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

       34.5              34.0                (1.4

Non-interest expenses

     16.4       14.9       (9.1
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     18.1       19.2       5.6  
  

 

 

   

 

 

   

 

 

 

Net revenue decreased by 1.4% from the same period in the prior year to 34.0 billion yen. Non-interest expense decreased by 9.1% to 14.9 billion yen. As a result, income before income taxes increased by 5.6% to 19.2 billion yen. Assets under management were 54.5 trillion yen as of June 30, 2020.

Operating Results of Wholesale

 

     Billions of yen     % Change  
   For the three months ended     (B-A)/(A)  
   June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

     159.5            248.7            55.9    

Non-interest expenses

     139.5       160.8       15.3  
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     20.0       87.9       339.2  
  

 

 

   

 

 

   

 

 

 

Net revenue increased by 55.9% from the same period in the prior year to 248.7 billion yen. Non-interest expense increased by 15.3% to 160.8 billion yen. As a result, income before income taxes was 87.9 billion yen.

 

– 3 –


Table of Contents

Other Operating Results

 

     Billions of yen     % Change  
   For the three months ended     (B-A)/(A)  
   June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

       60.3              94.7            57.0    

Non-interest expenses

     28.8       37.3       29.2  
  

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     31.5       57.4       82.5  
  

 

 

   

 

 

   

 

 

 

Net revenue was 94.7 billion yen, mainly due to the recognition of 71.1 billion yen profit resulting from the rights conversion related to the Tokyo Nihonbashi district redevelopment project. Income before income taxes was 57.4 billion yen.

 

(2)

Consolidated Financial Position

Total assets as of June 30, 2020 were 41,545.4 billion yen, a decrease of 2,454.4 billion yen compared to March 31, 2020, mainly due to the decrease in Securities purchased under agreements to resell. Total liabilities as of June 30, 2020 were 38,714.8 billion yen, a decrease of 2,553.8 billion yen compared to March 31, 2020, mainly due to the decrease in Securities sold under agreements to repurchase. Total equity as of June 30, 2020 was 2,830.6 billion yen, an increase of 99.4 billion yen compared to March 31, 2020.

 

(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)

Risks related to the COVID-19 pandemic

The COVID-19 pandemic has affected Nomura’s business, and this may continue in the future.

Various risks recognized related to the COVID-19 pandemic is disclosed in Risk Factors in Nomura Holdings, Inc.’s Annual Securities Report (the annual report filed in Japan on June 30, 2020) and Item 3. D. Risk Factors. in Form 20-F (the annual report filed with the U.S. Securities and Exchange Commission on June 30, 2020) for the year ended March 31, 2020.

 

– 4 –


Table of Contents
2.

Notes to the Summary Information

 

(1)

Changes in Accounting Policies

Measurement of Credit Losses on Financial Instruments

On April 1, 2020, Nomura adopted Accounting Standards Update 2016-13 “Measurement of Credit Losses on Financial Instruments” using a modified retrospective transition method. The impact of this adoption was, for financial instruments subject to current expected credit losses, ¥1,972 million increase in Allowance for doubtful accounts, ¥638 million increase in Other liabilities, ¥72 million increase of Deferred tax assets and cumulative effect adjustment to decrease Retained earnings, net of tax, of ¥2,538 million as of April 1, 2020.

For financial instruments elected for the fair value option, the impact was ¥9,774 million decrease in Loans receivable, ¥5,888 million increase in Other liabilities and cumulative effect adjustment to decrease Retained earnings, net of tax, of ¥15,662 million as of April 1, 2020.

 

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 30, 2020) and Form 20-F (the annual report filed with the U.S. Securities and Exchange Commission on June 30, 2020) for the year ended March 31, 2020.

The following table summarizes critical accounting policies within our quarterly consolidated financial statements, the critical accounting estimates inherent within application of those policies, the nature of the estimates, the underlying assumptions made by management used to derive those estimates and how the COVID-19 pandemic, has and is expected to continue to impact these estimates.

 

– 5 –


Table of Contents

Critical

accounting

policy

  

Critical accounting

estimates

  

Underlying subjective key

assumptions by

management

  

Impact of the COVID-19

pandemic

Fair value of financial instruments    Estimating fair value for financial instruments   

•  Election of appropriate valuation techniques

 

•  Principal markets are active or inactive

 

•  Significance of level 3 inputs

  

•  Dislocated financial markets as a result of the COVID-19 pandemic has increased market volatility and reduced price transparency for certain financial instruments.

 

•  Updates to inputs used to determine fair value of financial instruments.

 

       
Allowances for doubtful accounts    Determination of whether loans, other receivables and loan commitments are impaired and measurement of impairment losses   

•  Ability of borrowers to pay in accordance with contractual terms of the financial instruments

 

•  Future cash flows for impaired loans where impairment measurement using a discounted cash flow method

 

•  Fair value of collateral in impaired collateral dependent loans

  

•  Ability of borrowers to pay increasingly subjective as has required consideration both to pay in the short-term while governments imposed lockdowns and similar restrictions on trading, and in the longer-term once the restrictions were lifted and economies were expected to improve.

 

•  Estimating future cash flows increasingly subjective due to uncertainty in future performance of borrowers.

 

•  Estimating fair value increasingly subjective due to dislocated financial and non-financial markets.

 

       
Goodwill and intangible assets    Determination of whether goodwill and intangible assets are impaired and measurement of any impairment loss.   

•  Identifying impairment indicators which trigger an impairment test

 

•  Inputs to the fair value of reporting units which include goodwill and fair value of indefinite-life intangibles

 

•  Future cash flows for recoverability of finite-lived intangible assets

 

  

•  The COVID -19 pandemic was not considered an impairment indicator for goodwill and finite-lived intangible assets during the first quarter ended June 30, 2020. No impairment testing of the relevant asset was required.

Equity method investees    Determination of whether equity method investees are impaired.   

•  When a decline in the share price of listed equity method investees below carrying value is other-than-temporary

  

•  As a result of significant movements in global equity markets due to the COVID-19 pandemic, we assessed and concluded no other-than-temporary impairment losses were required to be recognized for the first quarter ended June 30, 2020.

 

 

– 6 –


Table of Contents

Critical

accounting

policy

  

Critical accounting

estimates

  

Underlying subjective key

assumptions by

management

  

Impact of the COVID-19

pandemic

Litigation provisions    Determination of whether a loss is probable and measurement of provisions   

•  Likelihood of eventual loss and ability to appeal or recover the loss from other parties

 

•  Management appetite to settle the matter

 

•  Loss amounts when claims are substantial, indeterminate or at an early stage

 

  

•  While the COVID-19 pandemic has delayed the potential resolution of certain litigation matters, it has not had a direct significant impact on our litigation provisions as of June 30, 2020.

       
Income taxes    Realization of deferred tax assets   

•  Future profitability of Nomura entities

 

•  Interpretation of tax rules by courts and regulatory authorities and tax examinations by taxing authorities

 

•  Weighting of positive and negative evidence around the likelihood that sufficient future taxable income will be generated to realize deferred tax assets in the relevant tax jurisdiction

 

  

•  Although estimating future taxable income was increasingly subjective due to uncertainty in future profitability of Nomura, it did not result in a significant impact on our determination of realization of deferred tax assets as of June 30, 2020.

 

– 7 –


Table of Contents
(1)

Consolidated Balance Sheets

 

             Millions of yen  
             March 31,
2020
    June 30,
2020
    Increase/
(Decrease)
 
ASSETS       

Cash and cash deposits:

      

Cash and cash equivalents

     3,191,889       3,354,793       162,904  

Time deposits

     309,373       179,486       (129,887

Deposits with stock exchanges and other segregated cash

     373,686       555,106       181,420  
  

 

 

   

 

 

   

 

 

 

Total cash and cash deposits

     3,874,948       4,089,385       214,437  
  

 

 

   

 

 

   

 

 

 

Loans and receivables:

      

Loans receivable

     2,857,405       2,478,897       (378,508

Receivables from customers

     541,284       352,756       (188,528

Receivables from other than customers

     1,731,236       1,136,206       (595,030

Allowance for doubtful accounts

     (13,012     (12,354     658  
  

 

 

   

 

 

   

 

 

 

Total loans and receivables

     5,116,913       3,955,505       (1,161,408
  

 

 

   

 

 

   

 

 

 

Collateralized agreements:

      

Securities purchased under agreements to resell

     12,377,315       10,989,037       (1,388,278

Securities borrowed

     3,529,797       3,436,806       (92,991
  

 

 

   

 

 

   

 

 

 

Total collateralized agreements

     15,907,112       14,425,843       (1,481,269
  

 

 

   

 

 

   

 

 

 

Trading assets and private equity and debt investments:

      

Trading assets*

     16,853,822       16,698,157       (155,665

Private equity and debt investments*

     44,278       43,012       (1,266
  

 

 

   

 

 

   

 

 

 

Total trading assets and private equity and debt investments

     16,898,100       16,741,169       (156,931
  

 

 

   

 

 

   

 

 

 

Other assets:

      

Office buildings, land, equipment and facilities

(net of accumulated depreciation and amortization of
¥397,114 million as of March 31, 2020 and
¥387,199 million as of June 30, 2020)

     440,512       433,106       (7,406

Non-trading debt securities*

     455,392       431,590       (23,802

Investments in equity securities*

     112,175       111,388       (787

Investments in and advances to affiliated companies*

     367,641       390,054       22,413  

Other

     827,022       967,354       140,332  
  

 

 

   

 

 

   

 

 

 

Total other assets

     2,202,742       2,333,492       130,750  
  

 

 

   

 

 

   

 

 

 

Total assets

     43,999,815       41,545,394         (2,454,421
  

 

 

   

 

 

   

 

 

 

 

*

Including securities pledged as collateral

 

– 8 –


Table of Contents
     Millions of yen  
     March 31,
2020
    June 30,
2020
    Increase/
(Decrease)
 
LIABILITIES AND EQUITY       

Short-term borrowings

     1,486,733       1,392,377       (94,356

Payables and deposits:

      

Payables to customers

     1,467,434       1,267,015       (200,419

Payables to other than customers

     1,653,495       1,205,137       (448,358

Deposits received at banks

     1,276,153       1,105,098       (171,055
  

 

 

   

 

 

   

 

 

 

Total payables and deposits

     4,397,082       3,577,250       (819,832
  

 

 

   

 

 

   

 

 

 

Collateralized financing:

      

Securities sold under agreements to repurchase

     16,349,182       14,790,152       (1,559,030

Securities loaned

     961,446       1,058,702       97,256  

Other secured borrowings

     717,711       363,224       (354,487
  

 

 

   

 

 

   

 

 

 

Total collateralized financing

     18,028,339       16,212,078       (1,816,261
  

 

 

   

 

 

   

 

 

 

Trading liabilities

     8,546,284       8,679,798       133,514  

Other liabilities

     1,034,448       1,019,940       (14,508

Long-term borrowings

     7,775,665       7,833,308       57,643  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     41,268,551       38,714,751       (2,553,800
  

 

 

   

 

 

   

 

 

 

Equity

      

NHI shareholders’ equity:

      

Common stock

      

                Authorized

    -    6,000,000,000 shares       

Issued

    -  

 3,493,562,601 shares as of March 31, 2020 and

 3,493,562,601 shares as of June 30, 2020

      

Outstanding

    -  

 3,038,587,493 shares as of March 31, 2020 and

 3,055,996,509 shares as of June 30, 2020

     594,493       594,493       —    

Additional paid-in capital

     683,232       676,040       (7,192

Retained earnings

     1,645,451       1,769,225       123,774  

Accumulated other comprehensive income (loss)

     (26,105     (25,973     132  
  

 

 

   

 

 

   

 

 

 

Total NHI shareholders’ equity before treasury stock

     2,897,071       3,013,785       116,714  

Common stock held in treasury, at cost -

      

454,975,108 shares as of March 31, 2020 and

      

437,566,092 shares as of June 30, 2020

     (243,604     (234,282     9,322  
  

 

 

   

 

 

   

 

 

 

Total NHI shareholders’ equity

     2,653,467       2,779,503       126,036  
  

 

 

   

 

 

   

 

 

 

Noncontrolling interests

     77,797       51,140       (26,657
  

 

 

   

 

 

   

 

 

 

Total equity

     2,731,264       2,830,643       99,379  
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

     43,999,815        41,545,394        (2,454,421
  

 

 

   

 

 

   

 

 

 

 

– 9 –


Table of Contents
(2)

Consolidated Statements of Income

 

                                                                                   
     Millions of yen      % Change  
   For the three months ended      (B-A)/(A)  
   June 30,
2019(A)
    June 30,
2020(B)
 

Revenue:

       

Commissions

     68,200       85,512        25.4  

Fees from investment banking

     27,311       10,828        (60.4

Asset management and portfolio service fees

     59,963       53,656        (10.5

Net gain on trading

     112,825       139,089        23.3  

Gain on private equity and debt investments

     791       1,070          35.3  

Interest and dividends

     199,473       106,543        (46.6

Gain (loss) on investments in equity securities

     (2,838     3,473        —    

Other

     45,654       113,878        149.4  
  

 

 

   

 

 

    

 

 

 

Total revenue

     511,379       514,049        0.5  

Interest expense

     179,378       53,302        (70.3
  

 

 

   

 

 

    

 

 

 

Net revenue

     332,001       460,747        38.8  
  

 

 

   

 

 

    

 

 

 

Non-interest expenses:

       

Compensation and benefits

     125,102       138,297        10.5  

Commissions and floor brokerage

     24,551       28,511        16.1  

Information processing and communications

     41,757       43,238        3.5  

Occupancy and related depreciation

     19,120       17,058        (10.8

Business development expenses

     7,828       2,832        (63.8

Other

     38,837       49,000        26.2  
  

 

 

   

 

 

    

 

 

 

Total non-interest expenses

     257,195       278,936        8.5  
  

 

 

   

 

 

    

 

 

 

Income before income taxes

     74,806       181,811        143.0  

Income tax expense

     17,917       37,513        109.4  
  

 

 

   

 

 

    

 

 

 

Net income

     56,889       144,298        153.6  
  

 

 

   

 

 

    

 

 

 

Less: Net income attributable to noncontrolling interests

     1,056       1,782        68.8  
  

 

 

   

 

 

    

 

 

 

Net income attributable to NHI shareholders

     55,833       142,516        155.3  
  

 

 

   

 

 

    

 

 

 

Per share of common stock:

       
     Yen      % Change  

Basic-

       

Net income attributable to NHI shareholders per share

     16.83       46.77        177.9  
  

 

 

   

 

 

    

 

 

 

Diluted-

       

Net income attributable to NHI shareholders per share

     16.48       45.65        177.0  
  

 

 

   

 

 

    

 

 

 

 

– 10 –


Table of Contents
(3)

Consolidated Statements of Comprehensive Income

 

                                                                                   
     Millions of yen     % Change  
   For the three months ended     (B-A)/(A)  
   June 30,
2019(A)
    June 30,
2020(B)
 

Net income

     56,889       144,298       153.6  

Other comprehensive income (loss):

      

Cumulative translation adjustments:

      

Cumulative translation adjustments

     (32,846     (95     —    

Deferred income taxes

     311       (14     —    
  

 

 

   

 

 

   

 

 

 

Total

     (32,535     (109     —    
  

 

 

   

 

 

   

 

 

 

Defined benefit pension plans:

      

Pension liability adjustment

     649       2,807       332.5  

Deferred income taxes

     1,598       (499     —    
  

 

 

   

 

 

   

 

 

 

Total

     2,247       2,308       2.7  
  

 

 

   

 

 

   

 

 

 

Own Credit Adjustments:

      

Own Credit Adjustments

     (1,726     603       —    

Deferred income taxes

     (250     (2,095     —    
  

 

 

   

 

 

   

 

 

 

Total

     (1,976     (1,492     —    
  

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     (32,264     707       —    
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     24,625       145,005       488.9  

Less: Comprehensive income attributable to noncontrolling interests

     197       2,357       —    
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to NHI shareholders

     24,428       142,648       484.0  
  

 

 

   

 

 

   

 

 

 

 

(4)

Note with respect to the Assumption as a Going Concern

Not applicable.

 

– 11 –


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 three months ended      (B-A)/(A)  
   June 30,
2019 (A)
    June 30,
2020 (B)
 

Net revenue

       

Business segment information:

       

Retail

     80,640       81,078        0.5  

Asset Management

     34,500       34,024        (1.4

Wholesale

     159,486       248,669        55.9  
  

 

 

   

 

 

    

 

 

 

Subtotal

     274,626       363,771        32.5  

Other

     60,289       94,673        57.0  
  

 

 

   

 

 

    

 

 

 

Net revenue

     334,915       458,444        36.9  
  

 

 

   

 

 

    

 

 

 
Reconciliation items:        

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

     (2,914     2,303        —    
  

 

 

   

 

 

    

 

 

 

Net revenue

     332,001       460,747        38.8  
  

 

 

   

 

 

    

 

 

 

Non-interest expenses

       

Business segment information:

       

Retail

     72,522       66,009        (9.0

Asset Management

     16,358       14,870        (9.1

Wholesale

     139,479       160,800        15.3  
  

 

 

   

 

 

    

 

 

 

Subtotal

     228,359       241,679        5.8  

Other

     28,836       37,257        29.2  
  

 

 

   

 

 

    

 

 

 

Non-interest expenses

     257,195       278,936        8.5  
  

 

 

   

 

 

    

 

 

 
Reconciliation items:        

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

     —         —          —    
  

 

 

   

 

 

    

 

 

 

Non-interest expenses

     257,195       278,936        8.5  
  

 

 

   

 

 

    

 

 

 

Income (loss) before income taxes

       

Business segment information:

       

Retail

     8,118       15,069        85.6  

Asset Management

     18,142       19,154        5.6  

Wholesale

     20,007       87,869        339.2  
  

 

 

   

 

 

    

 

 

 

Subtotal

     46,267       122,092        163.9  

Other*

     31,453       57,416        82.5  
  

 

 

   

 

 

    

 

 

 

Income (loss) before income taxes

     77,720       179,508        131.0  
  

 

 

   

 

 

    

 

 

 
Reconciliation items:        

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

     (2,914     2,303        —    
  

 

 

   

 

 

    

 

 

 

Income (loss) before income taxes

     74,806       181,811        143.0  
  

 

 

   

 

 

    

 

 

 

 

*

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 three months ended        
     June 30,
2019 (A)
     June 30,
2020 (B)
    (B-A)/(A)  

Net gain (loss) related to economic hedging transactions

     12,794        5,577       (56.4

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

     76        685         801.3  

Equity in earnings of affiliates

         8,265            6,609       (20.0

Corporate items

     1,391        45,090       —    

Other

     8,927        (545     —    
  

 

 

    

 

 

   

 

 

 

Total

     31,453        57,416       82.5  
  

 

 

    

 

 

   

 

 

 

 

– 12 –


Table of Contents
(6)

Significant Changes in Equity

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

 

     Millions of yen  
     For the three months ended
June 30, 2020
 

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

     683,232  

Stock-based compensation awards

     (8,314

Changes in an affiliated company’s interests in its subsidiary

     1,122  
  

 

 

 

Balance at end of period

     676,040  
  

 

 

 

Retained earnings

  

Balance at beginning of year

     1,645,451  

Cumulative effect of change in accounting principle (1)

     (18,200

Net income attributable to NHI shareholders

     142,516  

Gain (loss) on sales of treasury stock

     (542
  

 

 

 

Balance at end of period

     1,769,225  
  

 

 

 

Accumulated other comprehensive income (loss)

  

Cumulative translation adjustments

  

Balance at beginning of year

     (26,274

Net change during the period

     (684
  

 

 

 

Balance at end of period

     (26,958
  

 

 

 

Defined benefit pension plans

  

Balance at beginning of year

     (62,571

Pension liability adjustment

     2,308  
  

 

 

 

Balance at end of period

     (60,263
  

 

 

 

Own credit adjustments

  

Balance at beginning of year

     62,740  

Own credit adjustments

     (1,492
  

 

 

 

Balance at end of period

     61,248  
  

 

 

 

Balance at end of period

     (25,973
  

 

 

 

Common stock held in treasury

  

Balance at beginning of year

     (243,604

Repurchases of common stock

     (1

Sale of common stock

     0  

Common stock issued to employees

     9,323  
  

 

 

 

Balance at end of period

     (234,282
  

 

 

 

Total NHI shareholders’ equity

  
  

 

 

 

Balance at end of period

     2,779,503  
  

 

 

 

Noncontrolling interests

  

Balance at beginning of year

     77,797  

Net change during the period

     (26,657
  

 

 

 

Balance at end of period

     51,140  
  

 

 

 

Total equity

  
  

 

 

 

Balance at end of period

     2,830,643  
  

 

 

 

 

(1)

Represents the adjustment to initially apply Accounting Standards Update 2016-13 “Measurement of Credit Losses on Financial Instruments”, please refer to section “2. Notes to the Summary Information (1) Changes in Accounting Policies.”

 

– 13 –


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,
2020
 
    June 30,
2019
    September 30,
2019
    December 31,
2019
    March 31,
2020(A)
    June 30,
2020(B)
 

Revenue:

             

Commissions

    68,200       65,254       79,289       96,062       85,512       (11.0     308,805  

Fees from investment banking

    27,311       22,265       26,803       26,843       10,828       (59.7     103,222  

Asset management and portfolio service fees

    59,963       59,926       61,020       57,293       53,656       (6.3     238,202  

Net gain on trading

    112,825       105,609       109,266       28,909       139,089       381.1       356,609  

Gain (loss) on private equity and debt investments

    791       981       1,503       (3,368     1,070       —         (93

Interest and dividends

    199,473       215,881       203,050       176,068       106,543       (39.5     794,472  

Gain (loss) on investments in equity securities

    (2,838     2,083       2,243       (16,214     3,473       —         (14,726

Other

    45,654       101,905       14,276       4,156       113,878       —         165,991  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

    511,379       573,904       497,450       369,749       514,049       39.0       1,952,482  

Interest expense

    179,378       190,524       162,472       132,279       53,302       (59.7     664,653  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue

    332,001       383,380       334,978       237,470       460,747       94.0       1,287,829  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expenses:

             

Compensation and benefits

    125,102       120,425       128,987       104,906       138,297       31.8       479,420  

Commissions and floor brokerage

    24,551       25,446       24,568       31,558       28,511       (9.7     106,123  

Information processing and communications

    41,757       42,361       42,821       43,378       43,238       (0.3     170,317  

Occupancy and related depreciation

    19,120       18,360       16,276       19,230       17,058       (11.3     72,986  

Business development expenses

    7,828       7,906       8,509       7,642       2,832       (62.9     31,885  

Other

    38,837       40,396       44,130       55,474       49,000       (11.7     178,837  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total non-interest expenses

    257,195         254,894       265,291       262,188       278,936       6.4       1,039,568  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    74,806       128,486       69,687       (24,718     181,811       —         248,261  

Income tax expense

    17,917       (11,875     10,337       12,515       37,513       199.7       28,894  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    56,889       140,361       59,350       (37,233     144,298       —         219,367  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: Net income (loss) attributable to noncontrolling interests

    1,056       1,787       2,284       (2,758     1,782       —         2,369  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to NHI shareholders

    55,833       138,574       57,066       (34,475     142,516       —         216,998  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Yen     % Change     Yen  

Per share of common stock:

 

Basic-

             

Net income (loss) attributable to NHI shareholders per share

    16.83       42.11       18.07       (11.29     46.77       —         67.76  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted-

             

Net income (loss) attributable to NHI shareholders per share

    16.48       41.23       17.63       (11.31     45.65       —         66.20  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

– 14 –


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,
2019
    September 30,
2019
    December 31,
2019
    March 31,
2020(A)
    June 30,
2020(B)
    (B-A)/(A)     March 31,
2020
 

Net revenue

             

Business segment information:

             

Retail

    80,640       76,882       90,043       88,794       81,078       (8.7     336,359  

Asset Management

    34,500       25,676       25,405       7,024       34,024       384.4       92,605  

Wholesale

    159,486       156,698       186,527       145,908       248,669       70.4       648,619  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    274,626       259,256       301,975       241,726       363,771       50.5       1,077,583  

Other

    60,289       123,295       35,695       12,294       94,673       670.1       231,573  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue

    334,915       382,551       337,670       254,020       458,444       80.5       1,309,156  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation items:

             

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

    (2,914     829       (2,692     (16,550     2,303       —         D21,327  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net revenue

    332,001       383,380       334,978       237,470       460,747       94.0       1,287,829  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expenses

             

Business segment information:

             

Retail

    72,522       71,621       72,403       70,380       66,009       (6.2     286,926  

Asset Management

    16,358       15,630       16,085       15,760       14,870       (5.6     63,833  

Wholesale

    139,479       137,777       143,324       135,819       160,800       18.4       556,399  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    228,359       225,028       231,812       221,959       241,679       8.9       907,158  

Other

    28,836       29,866       33,479       40,229       37,257       (7.4     132,410  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expenses

    257,195       254,894       265,291       262,188       278,936       6.4       1,039,568  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation items:

             

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

    —         —         —         —         —         —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-interest expenses

    257,195       254,894       265,291       262,188       278,936       6.4       1,039,568  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

             

Business segment information:

             

Retail

    8,118       5,261       17,640       18,414       15,069       (18.2     49,433  

Asset Management

    18,142       10,046       9,320       (8,736     19,154       —         28,772  

Wholesale

    20,007       18,921       43,203       10,089       87,869       770.9       92,220  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    46,267       34,228       70,163       19,767       122,092       517.7       170,425  

Other*

    31,453       93,429       2,216       (27,935     57,416       —         99,163  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    77,720       127,657       72,379       (8,168     179,508       —         269,588  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation items:

             

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

    (2,914     829       (2,692     (16,550     2,303       —         D21,327  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

    74,806       128,486       69,687       (24,718     181,811       —         248,261  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

*

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     (B-A)/(A)     For the year  ended
March 31,
2020
 
    June 30,
2019
    September 30,
2019
    December 31,
2019
    March 31,
2020(A)
    June 30,
2020(B)
 

Net gain (loss) related to economic hedging transactions

    12,794       7,043       2,333       (4,622     5,577       —         17,548  

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

    76       1,254       4,935       336       685       103.9       6,601  

Equity in earnings of affiliates

        8,265           8,009           4,798         13,918       6,609       (52.5     34,990  

Corporate items

    1,391       (4,635     (9,095     (9,901       45,090       —              D22,240  

Other

    8,927       81,758       (755     (27,666     (545     —         62,264  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    31,453       93,429       2,216       (27,935     57,416       —         99,163  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

– 15 –


Table of Contents
(3)

Other

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

https://www.nomuraholdings.com/company/group/nsc/pdf/2021_1q.pdf

 

– 16 –