Tokyo: Nomura Holdings , Japan’s biggest brokerage, reported a 35% fall in fourth-quarter net profit on a squeeze in revenue in fees from trading and underwriting at home, outweighing a solid gain in its private equity business.
Nomura, which is expanding in Asia, Europe and the United States after buying part of Lehman Brothers in 2008, posted a net profit of ¥11.9 billion ($145 million) for the three months ended on 31 March, compared with a profit of 18.4 billion in the same period a year earlier.
In the previous quarter, ended 31 December, the brokerage had a net profit of ¥13.4 billion.
The result was slightly better than a consensus forecast for a ¥10.6 billion profit from three analysts surveyed by Thomson Reuters I/B/E/S after Japan’s earthquake and tsunami on 11 March.
“Nomura’s bottom line could have been better considering that it had more than ¥20 billion in profit from its private equity business,” said Azuma Ohno, an analyst at Credit Suisse Securities.
Nomura last month sold ball bearing maker Tsubaki Nakashima to US private equity firm Carlyle Group.
For the current business year to March 2012, the average net income prediction of six analysts is ¥75.4 billion. Nomura does not release its own outlook.
Its nearest rival, Daiwa Securities Group , on Tuesday posted a bigger-than-expected fourth-quarter loss in part because it had to put money aside to cover valuation losses on its holdings in real estate, insurers and other assets following Japan’s March earthquake and tsunami.
Nomura’s goal is to join the elite of global brokerages using its former Lehman network and contacts in Asia and Europe, while so far building its business in the US from the ground up rather than by acquiring a local rival.
On 29 March, Glenn Schiffman, head of its US investment banking unit, resigned his post just over a year after he was hired with a mandate to build the business.
To succeed in its global ambition Nomura needs to win a bigger share in the US, a market that accounts for about half of the world’s investment banking fees. It will also need to be a major player in Asia, a fast growing, but highly competitive market.