Nomura Holdings third-quarter net profit doubles on strong fixed income business

By Thomas Wilson

TOKYO (Reuters) - Nomura Holdings Inc's third-quarter profit doubled as the wholesale division of Japan's biggest brokerage benefitted from a jump in trading of bonds and currencies after Donald Trump's U.S. presidential election victory.

Nomura said in a statement on Tuesday its October-December net profit soared 99 percent to 70.3 billion yen ($619.49 million) from 35.4 billion yen in the same period a year earlier.

That was the brokerage's best profit in nearly two years, and the rate of profit growth was the highest in three years.

Nomura's strong results come after smaller rival Daiwa Securities said a day earlier third-quarter profit edged up on bond and currency trading, despite a drop in its retail business. [L4N1FK0EQ]

The results also mirror those of Wall Street investment banks such as Goldman Sachs and Morgan Stanley which this month posted jumps in profit on surging stock and bond trading revenue in the wake of Trump's victory.

Pretax profit at Nomura's wholesale division, which includes stocks, bonds and currency trading as well as investment banking, rose nearly five-fold from a year earlier to 47.4 billion yen, as trading volume in foreign exchange and bonds jumped after Trump's Nov. 8 triumph.

The performance helped Nomura's overseas business record a pretax profit of 31.4 billion yen, up from a loss of 19.9 billion yen last year, putting it on course to achieve a 50 billion pretax profit target for the full year, after deep cost cuts in April.

The wholesale unit was also buoyed by fees from advising companies in a spate of mergers and acquisitions, as well as equity finance deals such as Kyushu Railway Co's $4 billion October listing.

Pretax profit at Nomura's retail arm fell 7 percent to 25.9 billion yen due to heavy net outflows of cash and securities as investors booked profits amid a strong stock market performance.

The Nikkei average climbed 16 percent in October-December, spurred by a weaker yen and Wall Street's bets that Trump's policies would boost the U.S. economy.

Nomura's shares have soared over 35 percent since Trump's victory. The shares closed down 2.6 percent before the results announcement, compared to a 1.4 percent fall in the wider TOPIX index.

($1 = 113.4800 yen)

(Reporting by Thomas Wilson; Editing by Muralikumar Anantharaman)