TOKYO Nomura Holdings Inc, Japan's largest brokerage and investment bank, reported an 11 per cent increase in net profit on Wednesday as a partial stake sale offset a slump in investment banking.
Nomura's wholesale division, which houses its investment banking trading and businesses, recorded a loss of 1.9 billion yen $14.58 million during the first quarter of 2021, its first loss since April-June quarter.
A 28 billion-yen gain from the sale of its stake in affiliate Nomura Research Institute and a recovery in the valuation of the U.S. asset management unit helped Nomura post a net profit of 66.9 billion yen $513.51 million for the October-December period.
According to the data from analytics firm Dealogic, a global investment banking fee pool more than halved from the same quarter a year ago, leading to deep job cuts at Wall Street dealmakers.
Even as Nomura's investment banking business was underpinned by solid dealmaking activity in Japan, it confirmed layoffs of bankers in Europe and Asia. A month ago, Reuters reported that it had cut 18 Asian banking jobs.
Chief Financial Officer Takumi Kitamura told reporters that we have a solid amount of deals in the pipeline but they don't get finalized.
Kitamura said the company would stick to its strategy of beefing up its investment banking business.
Kitamura said we carried out job cuts in specific areas, but we didn't provide any details. He said that we will continue to invest our resources in areas that we have competitive strengths, such as the Greentech unit, as well as a merger and acquisition adviser in clean technology.
Kitamura said the market could bottom out because we seem to be gaining more clarity of the pace of the U.S. Federal Reserve's interest rate hikes.