Nomura Holdings Inc (NMR) 2013 Q3 法說會逐字稿

This is Atsushi Yoshikawa, I'm Group COO. Thank you for participating in today's conference call. First, I will say a few words before handing over to our CFO, Junko Nakagawa, and we will take your questions after that. Thank you.

Earlier today we announced our third quarter financial results reporting higher net revenue and income before income taxes in our retail, asset management and wholesale businesses. And sorry, today I have a cold. So my voice may sound a little funny. I apologize in advance. We increased our income in all businesses and also in all regions including our international operations.

In the retail division we reported robust sales of equities and investment trusts on the back of an increase in retail investor appetite supported by favorable market conditions. In asset management, assets under management grew as a result of improved investment conditions and fund inflows. Both divisions reported significantly higher pretax income.

All wholesale business lines booked an increase in revenues during the quarter with fixed income the key revenue driver. Wholesale pretax income was at the highest level in three years.

On a firm-wide basis, revenues and pretax income declined from the previous quarter due to factors in the other segment including a decline in revenues at consolidated entities and the effects of a tightening of the credit spread of -- on our own bonds.

Our CFO, Junko Nakagawa, will explain these factors in more detail in a minute. I will now hand you over to Ms. Nakagawa. Thank you.

I will now give you an overview of our financial results for the third quarter of the fiscal year ending March 2013 following the documents. All business divisions reported higher revenues and income as mentioned by Mr. Yoshikawa. By favorable market conditions, net revenue for retail, asset management and wholesale increased 30% quarter on quarter to JPY303.4 billion. Income before income taxes rose 4.6 times to JPY71.9 billion, our best quarter since Q3 of the year ending March 2010.

However, a number of factors unrelated to our business divisions led to a decline in firm-wide net revenue and income before income taxes. Let me give you the reasons why. Page 4. Third quarter net revenue declined 3% quarter on quarter to JPY389.1 billion. As already mentioned, all three business segments reported higher revenue increase by 30% at aggregate level.

The factors behind the firm-wide decline in revenues are reflected in the other segment and include a 16% drop in revenues at consolidated entities related to Nomura Land and Building to JPY108.9 billion and tightening of our own and other credit spreads, which led to a loss of JPY23.2 billion.

In addition, non-interest expenses include JPY24.1 billion write-down of real estate mainly held by consolidated variable interest entities. As a result of these factors, income before income taxes was JPY13 billion.

The majority of the JPY24.1 billion real estate write-down is, however, attributable to third parties and not Nomura Holdings. So the negative impact on net income is limited to only JPY2.1 billion. As a result, Q3 net income jumped 7.2 times to JPY20.1 billion, which equates to an annualized ROE of 3.8%.

Also international business performed well during the quarter and we are seeing results from our cost reduction program that started last year. All international regions reported pretax profits.

Next, please turn to page 5 for our business segment results. Net revenue of our three business segments increased 30% from last quarter to JPY303.4 billion. Pretax income was JPY71.9 billion, a 4.6 times, the highest level in three years. Detailed breakdown of each segment is shown from page 7 onwards. But before that please turn to page 6, which gives you the breakdown of the factors affecting income before income taxes and net income. As shown, pretax income in the three segments was robust increasing 4.6 times to JPY71.9 billion after deducting JPY23.2 billion loss related to our own credit and JPY24.1 billion real estate write-down at consolidated entities. Pretax income was JPY13 billion.

Of the JPY24.1 billion real estate write-down, JPY19.5 billion is not attributable to Nomura Holdings and is factored out as non-controlling interest. Accordingly, Q3 net income attributable to Nomura Holdings was JPY20.1 billion.

Turning now to business performance on pages 7 and 8, results of retail, net revenue was 18% increase quarter on quarter to JPY95.7 billion and income before income taxes increased 85% to JPY20.3 billion. The market turned favorable in December prompting increase in risk appetite among retail investors and a 23% rise in total sales driven by equities and investment trusts.

Retail's broad product offering and continued focus on providing consulting based services led to fine asset net inflows. Robust revenues offset arise in expenses that included a JPY6 billion charge related to the decommissioning of IT systems.

Turing to asset management on pages 9 and 10, net revenue increased 22% to JPY18.8 billion. Income before income taxes was up 60% at JPY7.3 billion marking the strongest quarter since Q1 of the last fiscal year. The improved investment environment and fund inflows led to a rise in net assets under management of JPY2.4 trillion to a total of JPY25.1 trillion at the end of the quarter. Incentives remuneration linked to performance also contributed to asset management earnings.

Please turn to page 17 for wholesale. Net revenue in wholesale increased 38% to JPY189 billion. Income before income taxes increased significantly quarter on quarter to JPY44.4 billion. Increased market conditions added to higher revenues in all businesses and across each region for our international operations. Our efforts to reduce costs continued to gain traction and we booked one-half expenses of JPY3 billion related to cost reduction in the third quarter.

To promote a further collaboration between fixed income and equities and to allocate management resources more efficiently, in December we established the global markets. As a result, the wholesale division now comprises of two business divisions; global markets and investment banking.

First on fixed income, please turn to page 12. Fixed income net revenue was JPY110.7 billion, up 25% Q on Q. It was the strongest quarter since 2009. Steady client revenues coupled with stronger trading revenues led to well balanced contributions made by all regions and products. Revenues were up in all international regions and in Japan. Excluding the effects of unrealized losses related to a change in valuation method used for certain derivatives, revenues increased significantly.

Please turn to page 13 for equities. Net revenue in equities increased 47% to JPY47.3 billion. Client revenues declined to 3% quarter on quarter due to a slowdown in activities in Europe and the United States. However, Japan reported a stronger quarter as global investors returned to Japanese equities. In late December, there was a rise in volatility in stock price index driving recovery of trading revenues in all regions. The reorganization of our global equities business announced in September is also on track.

Please turn to page 14 for investment banking. Net revenue in investment banking rose 89% to JPY30.9 billion. Other revenue posted a significant gain on the sale of Annington, a private equity investee company, during the third quarter. Investment banking gross revenue remained roughly unchanged at JPY33.4 billion.

In Japan, the ECM business contributed to earnings driven by REIT related deals. Internationally revenues were up in each region and the Americas reported its best quarter since the start of the buildout in 2011. We continue to make progress in cross regional collaboration and rank number one in the Japan related ECM, M&A and Samurai Bond league tables as well as taking the number nine spot in global M&A rankings.

Please turn to page 15 for an outline on expenses. Non-interest expenses increased 3% from the previous quarter to JPY376.1 billion. Compensation and benefits was up 1% due to the increase in revenues, but the run rate is down reflecting our revised cost base. And despite a decline in cost of goods sold at consolidated entities, other expenses increased quarter on quarter due to the JPY24.1 billion real estate write-down and the JPY7.3 billion charge related to the decommissioning of IT systems.

Please turn to page 16. The additional $1 billion cost reductions announced last September are progressing on schedule. We continue to focus on reducing both personnel and non-personnel expenses as we aim to complete 78% of the reductions by the end of March. At the end of December, we had completed approximately 50%.

Please turn to page 17 for an overview of our balance sheet. Total assets were JPY38.6 trillion. Gross leverage was 17.8 times and net leverage was 11.6 times. At the end of December, our Tier 1 ratio was 16.9% and our Tier 1 common ratio was 14.9%. Both ratios improved significantly compared to the end of September because we started calculating credit risk assets using the internal model method on December 31st.

Applying Basel 3 to our balance sheet at the end of December results in an increase in both credit and market risk giving Tier 1 and Tier 1 common ratios of 10.6%. Page 18 outlines our funding and liquidity. I'll leave it to you to look through it later except to say that there are no significant changes from the end of September.

Lastly, on page 19, you can see that our net country exposure to European peripheral countries at the end of December was $2.94 billion, representing a decline of $250 million from our exposure of $3.19 billion at the end of September.

Sovereigns account for 70% of this exposure as non-sovereign inventory declines and sovereign inventory increases. Our inventory consists entirely of trading assets that are marked to market on a daily basis and we will continue to manage our positions prudently. That concludes our overview of the third quarter results.

We would now like to take your questions. Thank you.

We have a question and answer session now. (Operator Instructions).

Masao Muraki, Deutsche Securities.

Thank you very much for this opportunity. First of all, market earnings. Fixed income revenues were extremely robust, most likely excluding sales commission, treating revenues were extremely healthy. Could you give us the breakdown and in addition could you give us the breakdown in the equities sales commission that is directly related to customer deals versus other factors and what will be the trend in Q4 and therein after? Fixed income revenues were quite robust in Q3. Position management related earnings, how do you view the trend in and after Q4?

My second question, the fourth quarter one-time off expenses, what's your estimate on one-off expenses in Q4? Most likely decommissioning of the IT system is mostly related to the retail segment. So I assume that retirement of the trading related IT system for the customer's trading will emerge in Q4. Could you give us any guidance and clues?

Mr. Muraki, this is Yoshikawa speaking, and on customer flow and trading let me give you an overall response. True that in Q3, the market environment worked favourably and in fixed income conventionally 60% accounted for customer versus trading 40%. That had been the split. But as far as Q3 is concerned, half of it was accounted for by trading. So it's 50-50 split customer versus trading. That's our assumption.

In the final quarter, how will the situation fair at this moment, we cannot give you any accurate estimate. But depending on how the market shall fair, we will respond to customer requirements and trading management and respond to customer flow as well.

As far as equity is concerned, usually 100% of our equity earnings are from customers. Japanese equity is our biggest strength and the orientation in the market was very explicit and therefore trading revenues did increase as a result and 30% probably was accounted for by trading revenues in that particular quarter, and we will also try to continue this trend into the Q4. Thank you.

This is Junko Nakagawa. Let me address the second point about the one-off expenses in Q4 and also the IT system decommissioning expenses or write-downs -- write-offs. Right now we are reviewing the -- our plans for the IT systems and we do expect a certain amount of one-off expenses.

I think it was in Q2, the announcements in Q2 that we explained the restructuring costs of more than JPY6 billion and this time it's roughly JPY3 billion, the restructuring expenses. So we are expecting similar levels of restructuring expenses up to Q2, this is including personnel and non-personnel expenses. And as for the IT system write-offs, yes, as we mentioned most of the write-downs this time was for retail and the total is about JPY7 billion. So some of it was for the wholesale division.

And as you can imagine, there will be some additional write-offs in Q4 or may be in the next fiscal year, we are expecting some more expenses, restructuring expenses, in relation to IT systems. So there will be some additional expenses coming up. Thank you.

Going back to the first point, in relation to the position management revenues for fixed income, when CDS spreads tighten, I think there is lot of revenues that you can book, but when -- can you continue to book revenues when CDS spreads are stable? Can you book similar revenues like you did in Q3? Is it technically possible to book the similar revenues when CDS spreads are stable?

This is Yoshikawa again. Yes, when credit tightens, it is easy -- it gets easier for us to book revenues. That's correct. However, this time, in this Q3, there was also rates and also ForEx and also securitization. These businesses, these positions also booked income. So in that sense, as for the future, we cannot be overly optimistic, but we would like to maintain and control adequate positions in various situations. And when credit starts to widen and liquidity dries up in the market, in that kind of situation, yes, the market over the condition will be very difficult for us.

Okay, thank you.

Jun Shiota, Daiwa Securities.

Thank you very much for this opportunity. I have two questions. Page 11, on page 11, your Japanese operations are explained derivatives evaluation method being changed. Could you be more specific about what changes have been made on evaluation methodology and will this have impact in the future quarter results?

Second question, page 30, retail situation is explained on page 30, JPY360 billion, great increase since the previous term. Pure retail customers are taking action. Is that the reason behind? Can you explain the factors? And in addition, January inflow and outflow would be my other question. Thank you very much.

Thank you very much. Let me take the first question first. Fixed income collateralized derivatives evaluation methodology change. I'm not sure whether my explanation is easily digestible, but each derivative deal is collateralized by certain collateral assets and depending on the characteristics of the collateral that is backing the derivative deal, we've chosen to change the evaluation methodology. But this is not unique to Nomura and we believe that this practice is quite standard within this sector.

In relation because of our situation vis-a-vis our competitors and peers, I would refrain from giving you further details. It's not just the evaluation of collateral, but it would be the evaluation of the total position including the collateral. And further, net increase in AUM in retail is your next question.

First of all retail, in retail I used the document in the presentation. And if you could focus on the market data for retail segment, turning to page 8, total sales breakdown is explained and the red portion is growing quite strongly, and on the bottom right of page 8, robust sales of stocks is depicted further, not only in stocks but in investment trust sales, which is represented by the blue-grey portion on the bar chart, has grown quite significantly since the beginning of January what had been the trend.

As Mr. Yoshikawa said at the beginning, the momentum is robust backed by the strength in the market. So the trend still continues into the calendar year. And, of course, we will continue to be sensitive in changes in the market and we will never become complacent. Thank you.

As for the first point, I think there was a big impact this time because it was a major change, but going forward, we expect not so much change as we did this time -- we saw this time?

Yes, as for future, in terms of a change that took place in this quarter, we will continuously listen to the markets and assess the situation. So we cannot commit anything. There may be some changes, but these changes lead to adequate evaluations.

So in terms of the mark-to-marketing process, we believe this helps us in achieving a more mark to market or adequate balance sheet. So we hope you understand this. At the moment we cannot make any commitments about future.

Just one additional question. Was this change due to some kind of market change or is it because you changed the way you evaluate, your evaluation?

Yes, it's because we changed our own methodology.

Thank you.

Natsumu Tsujino, JP Morgan.

The capital ratio under Basel 3 improved by about two percentage points. I think this is mainly due to the sale of Annington on page 17. As of September end, I think the figure was about 7% or a little above 7% as of September end. That's what I heard in the previous sessions, conference calls. But now has that exceeded 9%? That's my first question.

And my other question is, in terms of the liquidity regulations and the loosening of the regulations and the multiple-phase introduction of the regulation and the liquidity regulations. Initially, the liquidity regulations were expected to be even tighter than the Basel 3, but will there be any changes in -- or will there be an impact, in the loosening of the regulations or will you benefit from the loosening?

My third question is the corporate items, which I always ask about. The negative amount was quite large this quarter, about JPY58 billion, out of which DVA was about JPY23.2 billion and I assume this includes JPY24.1 billion of the real estate VIE. And assuming from -- guessing from your presentation, there was also an impact from the changes in the way you do the evaluation for the derivatives about minus JPY11 billion.

Even if you exclude that, it's about zero. So it's lower than the typical or the normal level. As for the restructuring costs in relation to personal expenses, it was smaller than Q2, but the IT disposal loss, there was -- it was booked in Q3. So are these the items that are included in the corporate items? Is that the right way to look at it?

Yes, this is Junko Nakagawa. Let me address your first point about Basel 3 ratio. Until the Basel 3 is fully applied, the regulations will be tightened step by step. And as for Nomura, we say roughly 10% -- we can maintain roughly 10% at the initial -- under the initial standard or the starting standards.

And going forward, there are various variables, which we have to keep in mind. So at the moment, all we say is 10%, roughly 10%, at the beginning. And as we show on page 17, that is as of December end. So the March end figure will change, but as of today or as of December end it's above 10%. So it is close to the level that we have been explaining. And I guess the question was about seg one. So does that answer your question?

Well, I assume that's at the initial, the starting standard. So you're not expecting or incorporating a full reduction instead of 19. And some of your peers disclose both figures. So that's why I asked.

Yes, at the moment we only disclosed the figures for the starting standard and there are various rules which may change before the final standards. So we will make disclosures when the time comes including the changes that take place.

As for your second point about the liquidity regulations, as you pointed out, there are major changes and major loosening of the regulations in various aspects. But as you probably understand, we have more stringent standards internally. So just because there have been some regulations, it does not mean that we will -- the figures will change for Nomura.

And although the market conditions have improved, we still cannot be overly optimistic, and just because the Basel liquidity regulations have been loosened, that does not mean that Nomura will loosen its own internal regulations or standards. And I assume our peers are under similar conditions, similar situations. So we will watch how -- what kind of actions they take and decide our own actions.

And your other point about -- I think it was about the -- about corporate items or others in the segment others?

Yes, I'm asking about the others segment, yes.

Yes, others. [57992] figure. Well, as for your third question, you mentioned about derivatives and the evaluation on derivatives, that is not included here. And I assume you already know about this, the JPY23.1 billion for the credit related items and real estate breakdowns JPY24.1 billion and the more than JPY10 billion that is left is I think what you are asking about.

And it always gets quite complicated and I'm sorry that you have to keep addressing this point. But the Group revenues also had an impact on this item. And also Nomura Real Estate, the revenues declined by 16%. So I think the gap between the two have a big impact, and also the changes or the difference between the Japanese accounting standards and US GAAP. And as we consolidate or come up with a consolidated statement, there are differences in the timing of when we book figures and recognize figures depending on which accounting standards we use.

And the restructuring cost, that also had an impact on this figure. And the restructuring costs tend to have a -- or tend to increase the figure. And including our quarterly disclosure and other disclosure that we make, we are constantly reviewing the litigation reserves, legal reserves and making the necessary additions to the reserves, which are not that big, but that is also included here.

Change in evaluation method of derivatives is included in the line above under corporate items, not in others. They are attributed to the business lines. It's indicated on page 12 of the document. That means that in corporate items, the reasons why -- why is this number a decline? Why did this fall?

The business lines are somewhat relevant, but difference in timing of recognition was one of the factors why. The timing, the gap of recognition was quite a significant factor. But partly due to restructuring measures, there was a decline in headcount at the outset. So, unutilized real estate increased quite suddenly.

As is well-known, real estate is attributable ordinarily to each business line, including the dormant space as well. Usually, even the dormant space ought to be attributed to each business segment. However, because restructuring was done on top-down basis as a measure of strategy, much of the unutilized real estate was booked under corporate items and remained in the corporate items.

And, of course, in the future we'd like to return this portion back to the business segment in order to reduce that portion borne by corporate items. And also Group companies, some of the Group companies are not attributable to business segments. And in comparison to the previous quarter, contributions from some of these Group companies was less.

And also IMM model appraisal was -- model approval was obtained, and that was a major cost in response to regulatory requirements, and that is why that cost is included in corporate items. And although the amount is small, the bond issuance cost is also included in corporate items.

Thank you very much.

Katsunori Tanaka, Goldman Sachs.

I've two questions. The first is, in relation to the personnel expenses as revenue improve. For example, Q on Q, the top line grew by 30% for the three business segments. And if you exclude the one-off personnel expenses, it's an increase of only 3% Q on Q. Going forward, as the top line improves, how will the personnel expenses trend? How should we understand the future outlook of the personnel expenses?

The second question is about the effective tax rate from Q4 onwards. Could you give us some color on what the effective tax rate will be?

This is Nakagawa. As for the personnel expenses, as you pointed out, the rate of increase has been very controlled, was -- may seem very much controlled. And as for the cost in the wholesale division, we do not break it down between personnel and non-personnel expenses. But here there was a big growth in revenues in wholesale. So we've incorporated increase in personnel expenses, assumed an increase in personnel expenses. But on the other hand, we're reducing various costs including the non-personnel expenses. So, on the one hand, the personnel expenses and business promotion expenses, like, business trip costs, communication costs tend to go up, but we're trying to control the overall costs. And these various cost sections are included here.

So, in terms of the personnel expenses, it comes up in two areas of the P&L. And as for the future, we do not disclose the breakdown, but roughly speaking about -- at the moment it's in the lower 40% level. And as of today, as Yoshikawa mentioned earlier, the revenues are improving. But on the other hand, we're working on improving our profitability, and we'll continue our progress in improving our profitability.

So the run rate, we do feel that the run rate has been coming down and we'll continue to improve the run rate. As for the effective tax rate, in terms of the next fiscal period, forecasting the effective tax rate is quite similar to forecasting our business results. But if we look at the Q3 performance, let's talk about the effective tax rate based on the Q3 performance, for Q3 the effective tax rate may seem very high close to 100%.

And even on a full year basis, it's close to 80% or more than 80%. It's very high. But for the current fiscal period, as we mentioned earlier, there are some run-off items. For example the real estate write-down is included in these figures. So that makes the effective tax rate calculation very complicated and obscure.

If you look at the waterfall chart that I used earlier, you can -- I think you can guess that the effective tax rate is somewhere between 30% to 40%. And although the figure was still small, we booked profits in all areas overseas. So that also has an impact on the effective tax rate. And if we can continue to generate profits in the overseas businesses, we would like to lower our effective tax rate to between 30% to 40%.

Thank you.

Futoshi Sasaki, Mitsubishi UFJ Morgan Stanley Securities.

Thank you very much. First of all, in the Q3 results, numerous write-downs and asset retirement expenses had been booked. Why at this timing did you choose to book these expenses real estate, derivatives, IT systems, all these run-off event emerged why in Q3? What's the reason behind this timing?

Secondly, the results of Q4 and the quarters to follow, how should we assume the future results? In comparison to Q3, how is the management viewing the direction? And also in tax effect, by utilizing tax effect, you maybe able to -- would you be able to minimize the effective tax rate? And also what's your thinking behind dividend payout at the end of fiscal year taking into consideration your prospects for the Q4 results? Thank you.

Thank you very much. Various unrealized losses have been booked. And why at this timing? These are all items that should have been recognized in Q3. So this was the most appropriate timing you recognize those loses. Other than that, I have no clear reasons. And real estate, because of the fund management in the daily operations of the investment, various actions take place and a few BIE investments had come to an end.

And that timing realized in Q3 and therefore we were able to get a better view on the recoverable amount. And because of those basis, we were able to come up with the appropriate estimate and that is why this timing. And also the realized value versus the book value at Nomura Holdings was one of the reasons why. And we now have a system in place in terms of IT, and we of course consulted with the various experts including the accountants and we were able to confirm that this was the appropriate treatment. In terms of the IT system or STAR, introduction of the STAR system, was that your question?

No. Just simply STAR V retail system was launched. So if it's just the legacy system retiring, then that's quite simple.

Yes, that's right. We will be decommissioning the legacy systems.

Thank you very much. Could you then respond to the second point?

Your second point with regards to the tax credit, as you have understood well, yes, we will take measures so that we will be able to utilize the tax credits. And coming to your final question, in the midst of revenue improvement, what would be our thinking behind dividend payment? Sorry, for this stereotypical response, but it would depend on the full-year results or the results of the second-half.

And depending on the revenues of the full-year and our expectations for the next fiscal year, we will make a decision. So for the time being, we are making efforts and we still have two months until the end of the fiscal year. And therefore I would like to solicit your understanding that we are not able to make any further comments.

Basel 3 will come into play, as I mentioned. Of course if profits are generated, it's important for us to retain benefits to the shareholders, and at the same time we have to take into consideration enough retained earnings in response to regulatory requirements as well. And therefore we will, in principle, continue with our conventional policy of dividend and we will decide on the actual dividend taking into consideration the full-year results.

This is Yoshikawa speaking. And on Q4 results what's our current presumption or assumption. According to the business lines, Japanese stock prices are going up and because of the weakening of the yen, in principle, of course, the customers' portfolio is improving. So in that sense, there seems to be some increased investment appetite. And in comparison to a few months ago, the investment appetite is better.

So our sales people and the customers are probably contacting each other more frequently. And in that context there could be many business opportunities to be expected. They will work had on consulting services by, of course, placing importance on compliance as well in order to increase assets.

Now in asset management, this would depend on the market environment. But most recently in comparison to the past, the type of securities or stock-related products with higher fees is also collecting funds, soliciting funds. So I think if we see more increase in the demand for high-fee products, then the earnings stream will become stable. And there was the performance linked incentive fee in the previous quarters. So they will focus on that as well.

Also fixed income, as is well known, much was helped by the surrounding environment. So to repeat the same results for two successive quarter, that would be quite a challenging task. And in this context, having said so, our customer business is expanding and our franchise is much more robust overseas as well. So we will continue to focus on customer business.

On equities, again our strength lies in Japanese stocks. Turnover is increasing, volatility is increasing. So we are in a good environment at least in comparison to the previous quarters or two quarters ago. And with stock prices at the current level, we will see business opportunities that had been unexpected. So there could be opportunities of collaborating with our investment banking to do block trading or ECM. We are hopeful that those opportunities will emerge.

On the other hand however European and US investment banks, when it comes to DCM and ECM in the United States, it's difficult for ourselves to participate unlike the Western peers. So in that sense it's quite unfortunate that we cannot participate. But, of course, we will make use of our strength as we try to capture business opportunities.

Cross-border included M&A deals. Yes, I've been reported that there are several in the pipeline. Because of the weakening of the yen, there are concerns that there will be less appetite for purchase or acquisition of overseas entities. But so far we don't see that as a trend. No diminishing. That was my simple answer.

Just one additional question if I may. In Q3, for example, if we look at your monthly profits, monthly earnings, was it concentrated in December or was it evenly spread out between October, November and December? Could you just give me a rough image of how the earnings was spread out?

I don't have the exact figures with me, but the feel that we get is it got better from October to November, especially for equities. And December was good in equities. There was a big change in situation in December.

If you look at the situation from April to November and the monthly revenues if you compare it with December, it was several times increase in December. So December was extremely strong for equities. As for the retail business, the clients' portfolios improved and that tends to -- the business tends to pick up as a result. So there was strong growth in December as well for retail.

Thank you.

(Operator Instructions).

This is Yoshikawa again, and I'm sorry for the complicated and somewhat technical results announcement and using up our time for the explanation. But as you can see the three business divisions, the environment was favorable, that helped. But under this favorable environment, we have been working on what we can. And in terms of the market conditions and the regulatory environment that surrounds Namura is constantly changing. So we cannot be optimistic, overly optimistic about the future.

We will continue to transform ourselves to be fit for the future to meet the needs of our clients and speed up the changes that we make. The clients who look to Namura for services and solutions face a diverse range of issues. And we will deliver high value-added services to these clients by further enhancing cross-divisional and collaboration in retail, asset management in wholesale and by stepping up cross regional collaboration centered on Asia, including Japan.

By implementing these measures, we aim to achieve earnings per share of JPY50 in the fiscal year ending March 2016, the year of our 90th anniversary. Thank you very much for taking the time to participate in today's call.

Thank you for your time. That concludes today your conference call. You may now disconnect your lines.

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.