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Operator
Good day, everyone, and welcome to today's Nomura Holdings First Quarter Operating Results for Fiscal Year Ending March 2010 Conference Call. Please be reminded that today's conference call is being recorded at the request of the hosting company. Should you have any objections, you may disconnect at this point in time. During the presentation, all the telephone lines are placed on listen-only mode. The question-and-answer session will be held after the presentation.
Unidentified Company Representative
Please note that this telephone conference contains certain forward-looking statements and other projected results which involve known and unknown risks, delays, uncertainties and other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these projections.
Such factors include economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions, and size, number, and timing of transactions.
Operator
With that, we'd like to begin the conference. Mr. Masafumi Nakada, please go ahead.
Masafumi Nakada - Executive Managing Director
Thank you very much. I will now give you an overview of our financial results for the first quarter of the fiscal year ending March 2010. Please turn to the page four of the document entitled Consolidated Results of Operations.
This page gives you an outline of our first quarter results. Net revenue for the first quarter was JPY298.4 billion, income before tax -- sorry, income before income taxes was JPY31.4 billion, and net income attributable to Nomura Holdings was JPY11.4 billion.
This recovery makes our first profit in six quarters, and comes as both our Retail and Wholesale operations took advantage of opportunities as the financial markets started returning to normal, and resources were invested in enhancing our client platform and increasing our flow businesses. So we had a strong start to the year, taking the first step on the path to reaching our objective of achieving a full year profit.
Our Retail operations enjoyed monthly purchases of over JPY1 trillion throughout the quarter, as our efforts to provide a consulting-based approach resonated with the Retail investors. In the Wholesale area, our new business platform is now fully operational, and our international business grew significantly returning to profit together with our domestic franchise. I will outline our ongoing business momentum in more detail in a moment.
We reported these strong results despite the fact that in accordance with the SFAS 157 and 159, we booked a net credit value adjustment of about JPY40 billion on certain self-funded structured bonds and credit valuation of derivatives as a result of tightening of our credit spreads.
We also made progress in our drive to cut costs. We reduced expenses and non-personnel expenses by an approximate combined JPY26 billion during the quarter.
Our capital structure and financial position remained robust. Preliminary figures shows that as of the end of June, our total capital ratio under Basel II was 20.8% and our Tier 1 capital ratio was 12.7%, both of which represent a further improvement from the previous quarter.
Next, please turn to the page five, where I will outline the progress we have made in expanding our operations. First, the Retail business in Japan, we were well prepared to move quickly and adapt to changes as market conditions normalize. We also successfully mobilized the resources of Nomura to deliver tailored financial consulting services to all retail customers. As a result, we recorded the monthly total purchases of over JPY1 trillion for the three months to June, spread evenly across stocks, bonds, and the investment trusts.
Net revenue in Retail jumped 54% from the prior quarter to JPY95.4 billion. Distribution of investment trust in the primary and the secondary markets combined totaled over JPY400 billion each month. This is further testament to our unparalleled presence in the retail market in Japan. Net asset inflow was JPY1.6 trillion continuing the recent expansionary trends in our retail franchise.
Asset Management booked net revenue of JPY18.7 billion, up 42% from the previous quarter on the back of high demand for investment trusts and the market recovery.
As page six shows, the high demand for newly launched funds has led to a recent increase in the Nomura Asset Management's share of assets under management -- sorry, share of assets under management and for stock investment trust.
We are also making progress in Asset Management outside Japan. As we said, our global asset management expansion on Asia. Earlier this month, we announced an agreement to invest in LIC Mutual Fund, a subsidiary of India's largest Life Insurance Corporation of India, and to form a joint venture.
So page seven shows how our Wholesale business is now fully operational, delivering world class services to our clients and generating substantial growth, both in Japan and internationally.
In Investment Banking businesses, such as underwriting and M&A advisory for corporate clients worldwide, we maintained a commanding share in underwriting in Japan, working on most of the major financing deals for Japanese corporates during the first quarter. As a result, Investment Banking net revenue increased fourfold compared to the prior quarter.
Page eight gives you an overview of the equity finance mandate we have won this calendar year. The results of these efforts can be seen in the league tables on the next page. With the new platform we can offer services to clients and the world, and I think it is easy to see how we are gaining access to a whole new client based -- sorry, whole new client base globally as evidenced by our recent award as the Best M&A House in China.
We now forecast on further increasing our market share by leveraging our strong position in Japan, Asia, and Europe. Global Markets is experiencing a rapid growth in its client platform and flow business volume in Japan, Europe and Asia, as it focuses on facilitating client orders for equities and fixed income and delivering best execution services to institutional investors around the world.
Page nine shows growth in average daily trades for our main product lines in Europe. Volumes have jumped considerably since the integration of our acquired businesses. The same comparisons are shown for Asia on the next page.
A good example of how the groundwork we laid last year to expand our business is starting to prove successful can be found in our Equities business. We ranked number one on the London Stock Exchange in June for client driven market share in U.K. equities, a first for Nomura.
The next page provides an overview of our share on the major exchanges. As you can see, we are gaining market share across the board. Our aim now is to continue growing our market share as a global liquidity provider.
As shown on page 12, revenues in both the Equities and Fixed Income businesses from clients based outside Japan were larger than those from Japan-based clients. Another powerful example of how our strategy to enhance our International Wholesale business last year is starting to deliver results.
The next page gives you a breakdown of the regional performance. The growth and the recovery in revenue results were most evident in Europe, a key region for our new global wholesale platform. This strong momentum resulted in record quarterly net revenue for Global Markets of JPY187.1 billion.
Page 14 gives a quarter-on-quarter comparison of revenues by business line in our Wholesale operations. As you can see, each business has experienced a sharp increase thanks to our newly expanded wholesale platform becoming fully operational during the first quarter.
Our share of Wholesale revenues within our global peer group rose sharply to 4.1%. The graph on the right shows the revenue share for the three months to June. We are now well on our way to catching up to the global competition.
In Merchant Banking, we didn't realize any exits from investments during the quarter, and we remain focused on boosting the value of the companies we have invested in.
So next I will outline our financial position and risk assets. Please turn to page 15. I have already mentioned our capital ratio, so I won't go into the -- that again. At the end of June, total assets were JPY27.5 trillion, shareholders' equity was JPY1.54 trillion, gross leverage was 17.8 times, and adjusted leverage was 11.3 times.
As shown on page 16, although assets and leverage have increased due to our Wholesale business becoming fully operational, and the expansion of our client flow businesses, we continue to manage our exposure to securitized products and illiquid level 3 assets, and we are increasing businesses that focus on the highly-liquid assets.
Please turn to page 17. We continued to reduce our exposure to illiquid assets. Although risk indicators such as value at risk have increased due to the launch of our Foreign Exchange business and other business expansion, we continue to manage risks with discipline in response to changing market conditions and to ensure a flexible approach to generating revenues.
Page 18 and 19 outline some key performance indicators we have now adopted. Please take a look at the bottom right of page 19. As you can see here, we cut personnel and non-personnel expenses by a combined JPY26 billion. We remain focused on reducing unnecessary costs in line with our target announced at the start of the current fiscal year.
Page 20 shows our CDS spread, which has been improving since March. Indeed, we were able to raise funds through a straight bond issuance last month on favorable terms. I would also like to point out that although our credit rating was downgraded by one agency during the quarter, that move does not necessarily represent the opinion of the market.
Before I open the lines to questions, allow me to briefly recap our medium-term strategy, which remains unchanged. Please turn to page 21. We aim to generate revenue capable of delivering JPY500 billion in pre-tax income, and return on equity of between 10 to 15%. To create a business portfolio with more stable earnings, we are aiming for a revenue structure based on the pyramid approach shown here.
Our Retail and Asset Management operations form a stable base on top of which comes our Global Markets trading businesses that fulfill our function as a global provider of best execution strategies.
On top of this is our Investment Banking business that delivers solutions to our worldwide client base. Then the Merchant Banking to provide the expertise and the resources to boost the value of investee companies. In this way, we aim to create a business portfolio with the Wholesale platform that although subject to market fluctuations offer scope to generate significant revenues while also maintaining a disciplined control over our businesses.
Although we were able to return to profit in the first quarter, market conditions remain uncertain. We maintain a conservative outlook for client trade volumes over the summer. We will continue to invest in our client and flow businesses and manage risks appropriately to ensure stable revenues on an ongoing basis.
That concludes my presentation. I would now like to take your questions.
Operator
Thank you. (Operator Instructions). Our first question comes from the line of [Paul Tang from Fidelity]. Please go ahead.
Paul Tang - Analyst
Hi. This is Paul Tang from Fidelity.
Masafumi Nakada - Executive Managing Director
Hi, Paul Tang.
Paul Tang - Analyst
Hi, (inaudible). Could you just give me the breakdown of the profits in Europe, the JPY15.4 billion profit in Europe? How much is it -- how much is from the former Nomura operation, and how much is from the Lehman operation?
Masafumi Nakada - Executive Managing Director
So, Paul Tang, it's a rather difficult question to answer because our business operation has been already fully integrated. So that's why the -- I basically cannot give you the numbers divided into the two parts of ex-Lehman and ex-Nomura. We are now one firm, one team. But the -- as I said, the synergy effects of the integration between the two firms, ex-Nomura and ex-Lehman, has been already as I said completed, and since the beginning of the quarter, we have seen the very dramatic change of business performance. So that's why in this sense this Europe's very good performance in the first quarter basically comes from the integration of the ex-Lehman and ex-Nomura. Thank you.
Paul Tang - Analyst
Thank you.
Operator
(Operator Instructions). Our next question comes from the line of [Takamune Fujikawa] from Boston Company. Please go ahead.
Takamune Fujikawa - Analyst
Good morning.
Masafumi Nakada - Executive Managing Director
Good morning.
Takamune Fujikawa - Analyst
I have a quick question. You're going to increase the personnel in Nomura, New York by reading the public articles. And where -- how much of personnel expense increase are you expecting next quarter?
Masafumi Nakada - Executive Managing Director
So firstly, we have started to rebuild up the U.S. operations, mainly in the area of Global Markets as well as the Investment Banking. But we are now taking a rather careful approach, and we started here new recruitment step by step. So in the first quarter, we still -- we hired just a limited number of people, and in the third and fourth quarter we will continue to build up hiring the new people, but it simply depend on the market environment and the market conditions. And that's why at this moment I cannot give you a clear number of the expectation for the personnel expense increase in the next few quarters. So, then as you may have seen recently, we have obtained a primary dealership in the United States and we got all the approvals from the authority in the United States. So, we are now going to build up a global platform of fixed income businesses, including United States in order to serve the world class and global services and products to our clients worldwide. Thank you very much.
Operator
Thank you. (Operator Instructions). We have no questions. Mr. Nakada?
Masafumi Nakada - Executive Managing Director
Thank you very much, ladies and gentlemen. Thank you again for your attention. Thank you.
Operator
Thank you for your taking time and that concludes today's conference call. You may now disconnect your lines.