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Issuer Credit Research

Issuer Flash: Nomura Holdings, Inc.

Issuer: Nomura Holdings | Document: Issuer Flash | Date: 2026-11-02 | Event: Q2 H1 Fy2027 Results

Report date: 2026-11-02 Event date: 2026-10-28 Event title: Q2 and H1 FY2027 Results

1. Flash Conclusion

Nomura's September-quarter results show that the broader wealth and investment-management franchise can contribute significant earnings even as the exceptionally strong June Wholesale quarter normalises. Group net revenue was JPY607.5bn, down 12% quarter on quarter but up 18% year on year; attributable net income fell 29% sequentially to JPY103.7bn, while rising 13% from a year earlier. The decline from the June peak tempers any extrapolation of that unusually strong quarter, rather than establishing a deterioration in the fundamental credit view.

The most constructive evidence is the continued shift toward recurring Wealth Management revenue. The division recorded a JPY755.4bn net increase in recurring assets, recurring revenue of JPY66.7bn and recurring revenue coverage of 79% of costs, up from 76% in Q1. These figures support the existing view that a deeper domestic client franchise can lift the earnings floor, although asset-based fees remain exposed to market values and client activity. Wholesale pretax income nevertheless fell by about half from Q1, illustrating the continuing sensitivity of this market-funded financial holding company to market conditions.

The event supports an unchanged hold-and-monitor issuer view rather than an upgrade, conditional on the September prudential and holding-company funding position being confirmed. The issuer's accessible highlights do not provide September-end capital, liquidity, TLAC or legal-entity funding metrics; the detailed linked financial documents were inaccessible during this review. June metrics from the prior flash are historical reference points, not evidence of September headroom. Senior holding-company bondholders remain exposed to subsidiary distribution capacity, market funding and the terms of individual loss-absorbing instruments.

2. Results and Operating Mix

For the six months to September, net revenue reached JPY1,294.2bn and pretax income JPY359.5bn, increasing 25% and 21% year on year. Attributable net income increased 27% to JPY249.3bn, with annualised ROE of 13.3%. These cumulative figures include the unusually strong first quarter and should not be treated as an annualised base case. Q2 annualised ROE was 10.9%, versus 15.4% in Q1.

Indicator Q2 FY2027 Comparison / credit relevance
Net revenue JPY607.5bn Down 12% QoQ, up 18% YoY
Pretax income JPY148.0bn Down 30% QoQ, up 8% YoY
Attributable net income JPY103.7bn Down 29% QoQ, up 13% YoY
Wealth Management pretax income JPY65.6bn Down 8% QoQ, up 44% YoY
Investment Management pretax income JPY27.4bn Down 39% QoQ and 11% YoY
Wholesale pretax income JPY46.1bn Down 51% QoQ and 13% YoY
Banking pretax income JPY4.4bn Up 20% QoQ, but a smaller contributor

The issuer reported JPY143.4bn of combined pretax income for the four major divisions, down 33% quarter on quarter but up 8% year on year. The difference from consolidated pretax income reflects other businesses and adjustments. This distinction matters: division income is useful for explaining the earnings mix, while creditor repayment depends on the wider group and individual legal entities.

3. Credit Read-Through

Wealth Management revenue rose 22% year on year to JPY141.5bn, and pretax income rose 44%, despite sequential declines from Q1. The record net increase in recurring assets and record recurring revenue indicate progress in converting the domestic customer base into a more durable earnings stream. Recurring revenue coverage of 79% of expenses is a more meaningful indicator of resilience than customer assets alone: it suggests that a larger proportion of the division's cost base can be covered before transaction-led income. It is still not equivalent to guaranteed income; weaker markets may reduce asset balances, flows and fees together.

Investment Management's quarter was more mixed. Its pretax income fell to JPY27.4bn from JPY45.0bn in Q1. Nomura attributed the decline partly to lower investment gains and one-off integration costs, while management fees remained firm. Net assets under management were JPY152.8tn at September end, below the prior flash's JPY156.4tn at June end, even though the issuer reported JPY478.0bn of quarterly net inflows. Inflows and the end-period balance measure different things; the disclosed highlights do not provide a complete bridge for market movements, currency or other changes. For creditors, durable client retention, fee margins and integration costs remain more important than treating the enlarged AUM balance as immediately available cash.

Wholesale's pretax income declined to JPY46.1bn from JPY93.3bn in the first quarter. Global Markets revenue of JPY254.2bn normalised from the prior record quarter, while investment banking revenue was JPY54.7bn. The sequential decline is consistent with the existing warning that exceptional trading quarters are not a stable run rate. It does not itself establish a loss of franchise strength or a capital problem: Wholesale remained profitable, and the issuer described continued strength in equities and higher revenues from advisory, finance and solutions. The credit test is whether the business can sustain reasonable earnings while containing balance-sheet usage and funding needs through weaker market conditions.

The Banking division remains smaller, with pretax income of JPY4.4bn. The issuer reported JPY1.361tn of loans at Nomura Trust and Banking and growth in the deposit-sweep business. These developments may diversify funding and revenues over time, but the disclosed divisional results do not establish that bank deposits fund holding-company debt or are freely transferable across regulated entities.

Nomura declared an interim dividend of JPY35 per share, compared with JPY27 a year earlier. The increase is relevant to capital retention, but the accessible highlights alone do not establish a complete payout, buyback or capital-movement bridge. The prior Q1 flash cited preliminary June CET1 of 12.9%, Tier 1 of 14.7%, total capital of 15.6% and LCR of 196.9%; those figures cannot be carried forward as September measurements. Detailed September regulatory and liquidity information is needed before assessing whether capital generation kept pace with risk-weighted assets, leverage and distributions.

4. What To Watch Next

Obtain the detailed Q2 financial summary and results presentation and reconcile September-end RWA, CET1, Tier 1, total capital, leverage, HQLA, LCR and TLAC with the final June regulatory disclosures. Check the legal-entity liquidity and funding-maturity picture before treating consolidated resources as available to holding-company creditors. Monitor Wealth Management recurring cost coverage and asset growth; Investment Management client retention, fees and integration costs; and Wholesale revenue, market risk and capital consumption across less supportive quarters. For any individual note, verify issuer, ranking, TLAC eligibility and resolution terms, together with current pricing, before drawing a security-specific conclusion.

5. Sources