Nomura Holdings, Inc. · TSE:8604
Nomura — Debt Investor Presentation (August 2010)
31 slides from Nomura's debt investor presentation, August 2010
Slide 1: Debt Investor Presentation, 1st Quarter FYE March 2011
Debt Investor Presentation 1st Quarter, Fiscal Year Ending March 2011 Nomura Holdings, Inc.
Slide 2: Presentation agenda
Presentation Executive Summary Overview of Q1 FYE’11 Capital, Liquidity and Risk Management Conclusion Appendix Unless otherwise stated, conversion of Yen figures to U.S. Dollars has been calculated at the exchange rate of USD 1 = JPY 88.49, i.e. FRB noon rate as of June 30, 2010 2
Slide 3: This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2010 Nomura Holdings,
This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2010 Nomura Holdings, Inc. All rights reserved. Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by
Slide 4: Executive Summary
1 Executive Summary 2 Overview of Q1 FYE’11 3 Capital Liquidity and Risk Management 4 Conclusion 5 Appendix
Slide 5: Executive Summary
Executive Summary Fifth consecutive quarter of profitability despite widespread market disruption and continued investment in platform expansion. - Net revenue decreased 7% from last quarter or 13% from Q1FYE’10 - Wholesale revenues decreased 36% from last quarter or 49% from Q1FYE’10, driven by w
Slide 6: Building a Leading Independent Investment Bank
Building a Leading Independent Investment Bank JPY 33,935bn ($383bn) balance sheet1, operating globally with more than 27,000 employees1 , overseas offices in 47 cities2 offering a full range of financial products across investment banking, asset management and brokerage Global presence and expe
Slide 7: Overview of Q1 FYE'11
1 Executive Summary 2 Overview of Q1 FYE’11 3 Capital Liquidity and Risk Management 4 Conclusion 5 Appendix
Slide 8: Overview of Results
Overview of Results Highlights Net revenue of JPY259.8bn ($2.9bn), income before taxes of JPY6.5bn ($74mn), net income of JPY2.3bn ($26mn) Continued solid performance in Retail and Asset Management divisions were offset by weaker Wholesale results that were driven by difficult market conditions,
Slide 9: Revenue Breakdown
Revenue Breakdown Net Revenue JPY Q1 FYE’11 Q4 FYE’10 QoQ Q1 FYE’10 YoY (USD) 111.0bn Retail 95.5bn +16% 95.4bn +16% ($1,254mn) 18.1bn Asset Management 18.0bn +0.7% 18.7bn -3% (($204.5mn)) 108.6bn Wholesale 168.4bn -36% 211.7bn -49% ($1,227mn) 237.7bn Segment total 281.9bn -16% 325.8bn -27% ($2,686m
Slide 10: Wholesale
Wholesale Net revenue of JPY108bn ($1.2bn) , down 36% from last quarter. Fixed Income business net revenue of JPY 41bn ($0.5bn), down 26%, as significant spread widening and market uncertainty led to reduced liquidity; however, further increased number of customer relationships and client penetr
Slide 11: Wholesale (Investment Banking)
Wholesale (Investment Banking) Net revenue and Income (loss) Before Taxes Global ECM / M&A ranking1 (billions of yen) Key performance indicator FY2010.3 FY2011.3 (USD Bn) 1Q 2Q 3Q 4Q 1Q 1Q Investment Banking (Gross) 38.0 33.2 81.7 43.3 29.0 $0.3 Global ECM Global M&A Allocation to other divisions 12
Slide 12: Wholesale: Progress of growth drivers—US and Asia
Wholesale: Progress of growth drivers—US and Asia US Asia ■ Client base expanding steadily ■ Platform expansion – Non-Banking Financial Company started operations in India (Apr 30). – Number of accounts with ISDA Master Agreements1 up 35% – Turned Korean branch into a local subsidiary (May 28). QoQ.
Slide 13: Retail
Retail Amid the difficult market conditions, the segment reported increased net revenue (up 16% quarter on quarter and year on year), and pre-tax income of JPY 37.7bn ($0.4bn), increased by 57% QoQ or 36% YoY Net revenue and Income (loss) Before Taxes Commentary (JPY bn) Business performance FYE
Slide 14: Asset Management
Asset Management Asset Management reported net revenue of JPY 18bn ($0.2bn), flat from last quarter, reflecting steady inflows of new money into investment trusts, with a quarterly fund inflows totalled approximately JPY 0.5tn ($6.3bn) Net revenue and Income (loss) Before Taxes Commentary (JPY bn)
Slide 15: Growth in Client Businesses to Enhance Stability in Earnings
Growth in Client Businesses to Enhance Stability in Earnings Franchise growing: number of active clients in Global Markets business increased steadily The Retail and Asset Management businesses continued to provide a stable revenue engine. Commissions and asset management & portfolio service fee
Slide 16: Expense Levels
Expense Levels Level of non-interest expense peaked in 2009 and have steadily declined since, mainly driven by prudent PE management despite an increase in headcount numbers. Non-PE expense remained flat despite infrastructure investments Expense Breakdown / Number of Employees JPY bn Expense 400
Slide 17: Capital, Liquidity and Risk Management
1 Executive Summary 2 Overview of Q1 FYE’11 3 Capital Liquidity and Risk Management 4 Conclusion 5 Appendix
Slide 18: Global Risk & Balance Sheet Management
Global Risk & Balance Sheet Management The Group Integrated Risk Management Committee determines Nomura’s risk tolerance. Risk tolerance is quantified through Risk Management’s Economic Capital methodology Focused on adequacy and quality of capital, leverage, and liquidity Risk Management Framew
Slide 19: Strong Capitalization, Liquidity Profile and Balance Sheet Management
Strong Capitalization, Liquidity Profile and Balance Sheet Management Best-in-class capital levels, with Tier 1 ratio of 16.9% and Total Capital Ratio of 23.3% as of June 20101 Balance sheet gross leverage remained at comfortable levels at 16.1x, net leverage at 10.1x Liquidity pool increased
Slide 20: Market and Credit Risk
Market and Credit Risk Actively worked to reduce Trading VaR as market volatility spiked Overall, Nomura’s counterparty credit risk exposure remained conservative, as nearly 90% of unsecured Marked-To-Market exposures were with investment grade counterparties (as of March 2010) GIIPS country CDS
Slide 21: Managed Level 3 Assets
Managed Level 3 Assets Level 3 Assets vs. Tier 1 Capital (%)1 Breakdown Level 3 Assets (June 2010)1,2 Level 3 assets 98% Net Level 3 Assets 100% Private Equity 2,000 85% Net Level 3 Assets / Tier 1 Capital Private Equities 1,500 55% Equity 21% Derivative contracts (assets) 44% 42% 50% 1,000 Equities
Slide 22: Capital: High Quality of Capital and Disciplined Growth in Balance Sheet
Capital: High Quality of Capital and Disciplined Growth in Balance Sheet Tier 1 capital has grown by 40% from pre-financial crisis level and consists of almost all common equity Balance sheet increase was primarily driven by secured transactions, such reverse-repos and trading instruments; while
Slide 23: Liquidity & Funding: Stable Funding Structure
Liquidity & Funding: Stable Funding Structure Solidified Cash Capital Surplus 1 Unsecured Funding Sources2 Cash Capital Cash Cash Surplus Capital Capital Short-term debt 6.0% Surplus Surplus 12.7% 13.5% Current portion of the Long-term 24% Long-term Long-term Long-term debt Funding Funding Funding L
Slide 24: Liquidity & Funding (cont'd): Diversified and Stable Funding Sources
Liquidity & Funding (cont’d): Diversified and Stable Funding Sources While funding sources in Japan are appropriately diversified, Nomura has embarked on a major effort to add further diversity across currencies and markets in order to secure flexibility, cost efficiency, and stability – During la
Slide 25: Conclusion
1 Executive Summary 2 Overview of Q1 FYE’11 3 Capital Liquidity and Risk Management 4 Conclusion 5 Appendix
Slide 26: Conclusion
Conclusion Continuing to execute the global strategy to build a world-class financial powerhouse – Five consecutive quarters of profitability despite adverse market conditions and continued investment in the global platform – Growth prospects in Wholesale segment underpinned by the leading positio
Slide 27: Appendix
1 Executive Summary 2 Overview of Q1 FYE’11 3 Capital Liquidity and Risk Management 4 Conclusion 5 Appendix
Slide 28: Consolidated Balance Sheet
Consolidated Balance Sheet Consolidated Balance Sheet (billions of ye n) M ar. 31, Jun. 30, Incre as e M ar. 31, Jun. 30, Incre as e 2010 2010 (De cre as e ) 2010 2010 (De cre as e ) Assets Liabilities Cash and cash deposits 1,352 1,048 (304) Short-term borrow ings 1,302 1,822 520 Payables and depos
Slide 29: Consolidated Income
Consolidated Income FY2010.3 FY2011.3 (billions of ye n) FY2006.3 FY2007.3 FY2008.3 FY2009.3 FY2010.3 1Q 2Q 3Q 4Q 1Q Revenue Commissions 356.3 337.5 404.7 306.8 395.1 102.0 95.4 101.0 96.6 118.1 Fees f rom investment banking 108.8 99.3 85.1 55.0 121.3 29.7 15.6 44.5 31.4 20.4 Asset management and po
Slide 30: Credit Ratings
Credit Ratings Rating and Japan Credit Rating S&P Moody's Investment Agency Information As of As of 17 30June July 2010 2010 Nomura Holdings, Inc. Long-term BBB+ Baa2 A+ AA- Short-term A-2 - a-1 - Outlook Stable Stable Stable Stable Nomura Securities Co., Ltd. Long-term A- Baa1 A+ AA- Short-term A-2
Slide 31: Global Reach
Global Reach ■ The 2008 acquisition of Lehman Brothers Europe & Asia, along with organic hiring in the Americas, has given Nomura a complete global footprint Global Presence Europe and Middle East Asia-Pacific Americas Dubai Beijing San Francisco Doha Hong Kong Los Angeles Bahrain Shanghai Toronto R
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