Nomura slips to Q4 net loss, first quarter in red since 2011

The brokerage firm has reported a fourth-quarter net loss of $173 million

Nomura Holdings Inc, Japan's biggest brokerage, said it slid to its first quarterly net loss since 2011 as its wholesale division fell into the red, its retail division weakened and its overseas operations lost money for a sixth straight year.

Two weeks after it warned it would cut some overseas jobs and operations, Nomura on Wednesday booked a fourth-quarter net loss of 19.2 billion yen ($173 million), compared with a net profit of 82.0 billion yen a year earlier. The loss included a 16 billion yen charge for redundancy packages.

The cutbacks announced this month signal an admission that Nomura's latest drive to achieve its long-cherished ambition to become a global player had run into trouble. Having run up $3.5 billion in losses overseas in six years, it said it was axing a brokerage unit and hundreds of jobs in Europe and the Americas.

The weak January-March quarter squeezed Nomura's full-year net profit to 131.6 billion yen, 41% below the earlier 224.8 billion yen - its best annual result for nine years. The annual profit came in well below a consensus forecast of 181.35 billion yen by 10 analysts polled by Thomson Reuters Starmine.

Nomura said on Wednesday its overseas operations posted an annual loss of 79.6 billion yen, affected by the tough market conditions that have made it harder for global banks like Goldman Sachs and Morgan Stanley to turn a profit.

The brokerage said its global markets business - part of its wholesale division - was impacted by widening spreads and market disruption after the introduction of negative interest rates by the Bank of Japan earlier this year. The wholesale division lost 22.8 billion yen between January and March, Nomura said.

Annual pretax profit at Nomura's retail division fell 21% compared to last year. In January-March alone, retail profit fell by 70% year-on-year to 12.2 billion yen, as market volatility resulted in sluggish investor activity, the brokerage said.

Meanwhile the company separately announced plans to spend up to 20 billion yen buying back its shares.

 

($1 = 111.1500 yen)