Nomura seeks new growth from private equity, debt and start-ups

TOKYO — Nomura Holdings, Inc. said on Tuesday it planned to beef up business with unlisted companies, including offering advice to start-ups, aiming to diversify revenue after quarterly earnings took a battering from the coronavirus pandemic.

Japanese biggest brokerage and investment bank said in a business strategy update it was seeking new growth in private equity, private debt and infrastructure, as well as in offerings of digital bonds and security tokens.

“To achieve sustainable growth, I have to take Nomura to a different dimension. How do we get there? Strengthening our expansion from public to private is the strategy,” Chief Executive Kentaro Okuda told an online investor briefing.

Nomura said current revenue from business with private companies was “not that big” but declined to provide specific figures.

This month Nomura posted a surprise fourth-quarter net loss, its first in five quarters, as the pandemic wreaked havoc on global stock markets.

“It’s unclear if Nomura will be really successful in private markets but fee income from the new businesses could become stable and a key driving force for growth,” said Toshihiro Matsuo, an analyst at S&P Global Ratings in Tokyo.

Nomura’s retail division saw revenue slide 20% in April after staff had to halt face to face meetings with customers due to Japan’s state of emergency to curb the spread of the virus.

But the bank believes the problem is temporary, forecasting 110 billion yen in pretax income for the division for the year ending March 2023, more than double the amount booked for the past business year.

Nomura said a year ago it was aiming for about 140 billion yen in cost cuts by March 2022. About 70% of that plan had been achieved, Okuda said. — Reuters