Nomura to nearly double profit over 7 yrs with focus on wealth management

Nomura Holdings, Japan's biggest brokerage and investment bank, said on Tuesday it aims to nearly double its pre-tax profit over seven years as it pushes deeper into wealth management.

Like many other financial firms, Nomura has been trying to bolster wealth management, which accounted for roughly half of its pretax income in the past financial year. The business is seen as more stable than trading which is closely tied to the ups and downs of markets.

It told an investor relations event that is targeting pre-tax profit of more than 500 billion yen ($3.2 billion) by the 2030/31 financial year, around 1.8 times what it had in the year ended in March.

In Japan, Nomura is the dominant wealth manager with a strong client base among high net wealth individuals and is targeting further expansion among business owners, startup managers and doctors.

But it has had less success abroad, remaining outside the top 25 in the latest ranking of Asia wealth businesses by Asia Private Banker.

Nomura has built out a dedicated team to tap into Asian markets, hiring more than 70 private bankers over the past three years. It has also said it wants to become one of the top 15 wealth managers in Asia over the long term and sees India and the Middle East as promising markets for growth.

For its more capital intensive wholesale business, which includes investment banking and trading, Nomura is hoping to generate organic growth rather than bring in capital from other parts of the group, Group CEO Kentaro Okuda said.

This is intended to incentivise the wholesale unit to pursue higher return on equity (ROE) business lines, Nomura's head of wholesale, Christopher Willcox, added.

Nomura, which is encouraging each of its divisions to be conscious of return on equity, had ROE of 5.1 per cent in the last business year. But Okuda said management was confident its ROE target of 8%-10% was within reach next year.

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