Nomura Holdings Inc (NMR) 2015 Q4 法說會逐字稿

Good day everyone and welcome to today's Nomura Holdings fourth quarter and full year operating results for fiscal year ended March 2015 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. (Operator Instructions) The question-and-answer session will be held after the presentation.

Please note that this telephone conference contains certain forward-looking statements and other projected results which involve known and unknown risks and 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 political events and investor sentiment, the level and and volatility of the interest rates, currency exchange rates, security valuations, competitive condition and size, number and timing of the transactions.

With that, we'd like to begin the conference.

Mr. Shigesuke Kashiwagi, please go ahead.

This is Shigesuke Kashiwagi, CFO. I will now, give you an overview of our financial results for the full year and fourth quarter of the year ended March 2015 using the document titled, Consolidated Results of Operations. Please turn to page 2.

For the full year, both revenues and income increased year on year, with net income at the highest level since the year ended March 2006.

Net revenue increased 3% to JPY1604.2 billion. Income before income taxes remained strong at JPY346.8 billion, but declined 4% year on year due to higher costs as a result of the Yen depreciation.

Net income increased 5% to JPY224.8 billion as the effective tax rate declined due to improved profitability in our international business and other factors. ROE was 8.6%.

The graph on the right shows the trend of income and EPS for the past five years. Compared to the fiscal year, ended March 2013, when the current management team announced their first management target, our domestic business has grown and cost reductions focused on our international business have delivered results, with income before income taxes increasing 46% from JPY237.7 billion to JPY346.8 billion. Net income roughly doubled to JPY224.8 billion due to the lower effective tax rate.

We reported EPS of JPY60 beating our March 2016 target of JPY50 for the second straight year and making a step closer -- taking a step closer to achieving our March 2020 EPS target of JPY100.

Today, we also announced a year-end dividend of JPY13 per share for shareholders of record as of March 31st, 2015. That gives an annual dividend of JPY19, up JPY2 from last year's JPY17 per share. Our dividend payout ratio is 30.8%.

Please turn to page 3 for an overview of our fourth quarter results. We saw a rebound in our international business, particularly, in EMEA and the Americas during the fourth quarter with net income at the highest level in two years.

As shown in the graph on the bottom right, income before income taxes from our three business segments increased 68% quarter on quarter to JPY101.4 billion as retail and asset management remained resilient and wholesale reported a significant improvement in profitability.

However, groupwide income before income taxes declined 10% due to factors not included in the three business segments, such as losses related to changes to our credit spread, a decline in earnings of affiliates and lower unrealized gains on securities.

Net income was JPY82 billion, the highest in the past two years, as our effective tax rate declined from 40% last quarter to 22% as a result of improved profitability overseas and lower tax expenses in Japan.

Please turn to page 6 for an overview of results in retail. Full year net revenue in retail was JPY476.5 billion which, although, down 7% from the particularly strong previous year was in line with expectations and demonstrates continued progress in transforming our business model. Retail client assets reached a record JPY109.5 trillion.

We continue to manage costs tightly and full year income before income taxes reached JPY161.8 billion, the third highest level in 14 years.

Fourth quarter net revenue was JPY122.9 billion, while, income before income taxes was JPY40.9 billion.

Although, these results are down from last quarter when primary transactions and other stock sales were strong, we continue to see robust sales of global high dividend stock funds and products investing in global bonds.

The Japan Enterprise Value Improvement Fund, which opened for subscriptions in March, has got off to a good start by tapping into client needs.

Fourth quarter results also include one-off expenses, such as a charge on decommissioning IT systems.

Please turn to page 7. Fourth quarter recurring revenue in retail was JPY72 billion on an annualized basis, reaching our March 2016 target one year ahead of schedule.

By focusing closer on meeting the needs of our clients, net inflows into discretionary investments and sales of insurance products have grown significantly since last year, as shown in the bar graphs at the bottom of the page.

Please turn to page 8 for asset management. Full year net revenue increased 15% to a record JPY92.4 billion, and income before income taxes grew 18% to JPY32.1 billion.

In the investment trust business, strong market conditions drove inflows into funds seeking income gains and funds for discretionary investments.

Internationally, our local asset management firm in Taiwan was consolidated. And assets under management in the UCITS compliance funds doubled. As a result, assets under management reached a record high of JPY39.3 trillion at the end of March, up 28% from last year.

Fourth quarter net revenue remained solid, up 2% quarter on quarter at JPY23.9 billion despite the absence of dividend income booked last quarter.

One-off expenses such as the charge for decommissioning of IT systems and an FX loss on an international investment led a to a 29% decline in income before income taxes to JPY6.7 billion.

Please turn to page 9. The graphs on the left show continued inflows, mainly into investment trusts backed by our highly regarded investment management expertise. This helped drive an expansion in assets under management.

The grey bar graph on the top right shows our share of public investment trusts at 24%, the highest since March 2004.

Please turn to page 10 for an overview of wholesale. Wholesale reported full year net revenue of JPY789.9 billion. There were some challenging market conditions during the year, such as in the third quarter. But we were able to overcome this to report a 3% increase in net revenue as growth in our client franchise and robust performance in AEJ offset a slowdown in EMEA and the Americas.

Income before income taxes was JPY82.2 billion. We continually reviewed performance throughout the year with an emphasis on profitability and capital efficiency and we maintained our focus on pay for performance. However, higher costs due to the weaker yen led to a 26% decline in income before income taxes compared to the previous year.

Fourth quarter net revenue increased 29% to JPY231.5 billion. All business lines reported stronger revenues versus the third quarter. In particular, fixed income in EMEA and the Americas rebounded from a challenging third quarter.

Stringent cost control resulted in the highest quarterly income before income taxes in six years of JPY53.8 billion.

Please turn to page 11 for results by business line. In global markets as shown in the graph on the right, full year net revenue increased by 5% as Japan and AEJ offset a slowdown in EMEA and the Americas.

Fourth quarter net revenue increased significantly up 33% quarter on quarter to JPY199 billion. Fixed income made a strong contribution with net revenue increasing 60% to JPY122.3 billion.

As shown in the heat map the Americas and EMEA reported higher revenues with rates and credit rebounding from a sluggish third quarter. AEJ revenues remained strong although softer than the particularly robust third quarter.

In Japan, credit and FX had a good quarter. Equities net revenue was up 4% at JPY76.8 billion. Although AEJ slowed the EMEA cash business was robust and derivatives improved in Japan and the Americas.

Please turn to page 12 for investment banking. The graph on the top left shows fourth quarter net revenue of JPY32.4 billion, up 11% quarter on quarter. Gross revenue was JPY57.3 billion representing the best revenue quarter since December 2010.

Revenues in Japan remained roughly unchanged from last quarter driven by multiple high profit mandates for convertible bond and retail bond issuances. International revenues increased quarter-on-quarter driven by EMEA and the Americas. As shown here in the graph on the right, full year gross revenue increased 5% driven by a gain in international revenues of approximately 20% to the highest level in six years. As a result, international revenues accounted for over 40% of total investment banking revenues.

Japan revenues remained roughly unchanged amid a decline in the fee pool of about 20%. Our market share in the ECM, DCM and M&A rate tables increased.

Please turn to page 13 for an overview of expenses. Full year groupwide expenses were up 5% on year on year at JPY1,257.4 billion; while this is mainly due to yen depreciation, other factors included an increase in commissions or brokerage due to higher trading volumes and the addition of consolidated subsidiaries, expenses declined when you strip out these factors.

Fourth quarter expenses were JPY329.6 billion up 7% quarter on quarter due partly to yen depreciation. Other expenses increased by 25% due to the booking of a charge for the de-commissioning of IT systems and the recognition of the FX loss on an international investment in asset management I mentioned earlier. Compensation and benefits declined when you strip out the effects of currency movements.

As a result of the introduction of the Full Career Retirement scheme in the year ended March 2013, first quarter expenses trended up significantly for two years. We recently changed a part of this scheme and forecast that we can largely standardize the booking of these expenses throughout the year from the first quarter of the current fiscal year.

Please turn to page 14 for an update of our balance sheet. Total assets were at JPY41.8 trillion, gross leverage was 15.4 times and net leverage was 9.3 times. Our Basel III Tier I and Tier I common ratios were at 12.9%, up from 12.5% at the end of December as risk assets declined centered mostly on market risk.

As shown on the top right, applying the fully loaded Basel III 2019 standard to our balance sheet at the end of March gives a Tier I ratio of 12.4%, up 0.7% from December.

On the bottom left, we have initiated disclosure of our Basel III leverage ratio which was 3.8% at the end of March and is above the Basel minimum requirement of 3%.

That concludes the overview of our full year and fourth quarter results. To conclude, we made progress in improving international profitability during the year and EPS grew 8% to JPY60.

The transformation of our retail business is starting to deliver results and is having a spill on effect to our asset management business. We made significant progress over the past year in expanding stable revenues.

Our focus on performance reviews and pay for performance in wholesale led to improved profitability in our international business. We can expect to see a further improvement in earnings quality as we offer more products and trade with new clients.

Although loss before income taxes from our international operations was just over JPY16 billion, when you exclude provisions for legacy issues our international operations were profitable.

We remain focused on becoming linear to ensure consistent level of profitability under any environment and working toward achieving our March 2020 EPS target of JPY100. Thank you.

We have a question and answer session now. (Operator Instructions) Mr. Muraki, Deutsche Securities.

Thank you, this is Muraki. I have two questions. First is related to your international business and second is your policy on shareholder return. In your comment at the end of the presentation you talked about the P&L from the overseas business and if you set aside the costs for the litigations ongoing it was profitable, that's what you mentioned. And in Q4, I think that you booked some good figures, but what are the risks of booking additional costs or reserves in the coming or the new fiscal year ending March 2016?

And you mentioned how the international business is profitable excluding these extraordinary items and your target is to improve the profits to JPY50 billion in the coming or in this current fiscal year, but how has the environment been in April onwards? Is the environment favorable and do you think you can achieve that target, and what are the -- what's your current outlook on achieving that JPY50 billion target?

My second question is about shareholder return. Over the past two years in March 2013 and March 2014 there was dividends and also the share buybacks which you announced, and you returned about 60% of your income. But for the March 2015 that percentage has come down to less than 50%, and as of today you have not made an announcement for share buybacks. As for your shareholder return in the March 2016 year onwards, you have announced a revised or a slightly revised dividend policy but 30% of consolidated net income, that's -- you have outlined that as one of the benchmarks.

So will you continue to payout 30% in dividends; and for share buybacks if your PBR is less than one times you might conduct share buybacks, is that the way to think about your shareholder return?

On your first point, we already achieved profitability in international operations. Are we going to meet the target of JPY50 billion? What are the measures to be taken? Allow me to answer that question.

In principle, as I said in my presentation, of late, we have conducted performance review continuously and engaged in cost reduction on a continuous basis. In the second half, if you look at the wholesale division numbers, I think they are pretty good. In the yen basis it's pretty high but in the dollar basis it's lower. In recent months, in terms of the run rate, I think we are in the early $6 billion. So breakeven point is coming down, that is one point I wanted to clarify.

And with respect to our business, the market conditions, market environment into this new fiscal year for the wholesale division is quite good, it's favorable. While it's true that situation is mixed depending on the region, Asia and Americas are good; EMEA may be somewhat slower.

(Inaudible) as I've said, the impact from the upgrade by Moody's in the fourth quarter new clients that we've developed have increased more so than we expected. I think we are increasing the pace of new client acquisition since fourth quarter and onward.

And in order to expand business going forward between regions we have to have deeper product collaboration; we need to promote that further and for that to happen we have reshuffled management members, those who were with IB in Tokyo are transferred to AEJ and AEJ heads being transferred to Europe, the heads in Europe are coming back to Tokyo and becoming deputy heads of our market. So we have reshuffled personnel.

Rates business is a quite challenging area. In the third quarter last fiscal year in the U.S. and EMEA rates did have a dampening effect on our performance, and [Nakashima] who is in Tokyo, an executive officer, he is an expert on rates and he will be the GM Head in EMEA.

So from the head of Tokyo fixed income to European Head he will be moving. And we have also recruited new fixed income personnel. So we are strengthening our personnel in this area. And so we are going to continue to work toward achieving the JPY50 billion target.

Of course market conditions are uncertain that is the nature of the market. And are we going to stretch ourselves too far? No, we hope to just build on the numbers that we have been building.

And your first part of the question, special expenses, are they going to continue to happen? I think we have reserved everything that we foresee for the time being. If there is something new that comes up, any new news, the story may be different; but as far as what we can foresee we have reserved sufficiently.

And with respect to shareholder return, for the past two years the ratio has been 60% you mentioned. In our minds, we subtract the portion for stock option. So I think this fiscal, term rate was 42%.

And as far as shareholder return ratio is concerned should we have a criteria and work toward it?

No, I don't think we are going to do so. But as you mentioned payout ratio is 30%, it was raised from JPY6 to JPY13. Anyhow it's -- perhaps may have increased uncertainty for (inaudible), so 30% plus if there is enough capital surplus and if the share price is low then we may conduct a buyback and the share price level we have been watching EPS and PBR as one as in the criteria, and we may not necessarily stick to that criteria all the time but we are watching that as of now. And if our international operations profitability rises, the share price may go up. Are we going to do nothing? Not necessarily, we would like to make a decision as necessary.

Regarding your first point, you plan to achieve a JPY50 billion through making efforts in your business and implementing various initiatives. So meanwhile, your balance sheet seems to have stopped expanding for the time being. So what kind of -- what will you do to increase market share, and you also seem to have been aggressively hiring in the U.S. but will you be further expanding your business or not in the year ending March 2016?

With respect to the balance sheet, as I have been saying since the last fiscal year net stable funding ratio, leverage share ratio, there are such restrictions from the regulatory side. So we need to value our resources and be careful as to how we use them. And this something that I have always said, but the liquidity cost is charged to the front desk. So the front desk, the front office for that business that uses the balance sheet they are reviewing such business and that is why we have reduced the size of our balance sheet.

Are we going to continue to reduce the size of the balance sheet, we don't know yet, but return on the balance sheet, that is something that the front office is very much conscious of, right now.

Regarding personnel recruitment, front office is recruiting people in Investment Banking Americas, that's where the main recruitment is happening. We don't have a fine breakdown of where personnel are but I don't think we have seen a major increase in global markets. And the total staff has increased by 800 to 900 in the past year but that's mostly in AEJ. We have a subsidiary in Thailand and we also have an asset management firm in Taiwan. We acquired them and as a result staff increase of 700 to 800.

So the main increase in whole sale is in the U.S. investment banking division. And of course we have to watch our profitability as we increase the staff; we want not to overly increase our staff. Thank you.

Natsumu Tsujino, JPMorgan Securities.

I have three points, first of all on expenses and others; JPY68.6 billion in the three months period. Earlier you talked about decommission of IT systems and FX loss; so I think they are included here. And reserve for litigation costs from the past must also be reflected here. So all in all when everything is included how much increase has there been?

And in association with that, I am sorry for going into detail, but this reserve by segment, so where is it included in the other segment? In terms of numbers how large is it? You may not be able to disclose all of that, if you could just tell me where it's included and with respect to compensation and benefits.

Looking at the profitability of growth for markets compared to FY 2013, in FY 2014 I think profitability is quite good, on par with what was achieved the previous year. And last fiscal year, during the term, I think compensation and benefits increased by JPY30 billion or so. And in the first quarter this fiscal year, so let's say, that we annualize the amount expense in FY 2014, and are we going to see one quarter of what was it posted last year in the first quarter. So JPY144 billion, that's total compensation and benefits. So it wouldn't be JPY10 billion but close to JPY10 billion could possibly be posted in the quarter. Are the right track, it's the image that I have, correct.

So that's my second question. And another point, global markets revenue; well this time wholesale performance was led by global markets. Is it sustainable, is my question? Rating by Moody's was improved you mentioned, and were you able to get income from certain deals unexpectedly or it was too good if there were such factors please share with us.

Okay. First let me answer your question about whether it is sustainable. I hope it is, but if there is a -- if ECB lowers the interest rates, with the lowering of it in EMEA, our earnings are improving significantly. So, in the Americas, rate trading has not been that strong but with the new hires that we have made, our revenue opportunities could expand. So we are -- I do have hopes for that. So for the overall wholesale figures, I don't think it will be -- or if it's flat, I think we would call ourselves lucky.

And your second question, I didn't quite get what you were asking but let me attempt to answer it. For March 2015, the expenses in March 2015, and also the FCR, full career retirement in March 2016, it will be booked on an even basis for each quarter, so it will be leveled out.

And just give me a minute please. I think in the compensation and benefits for this year, will be quite close to one-fourth of the total amount for the last fiscal year, and as for the full career retirement, frankly speaking, there will be an increase in the number of people eligible for full career retirement. The headcount of people eligible will increase.

Meanwhile, there has been some bonuses that have been pushed forward and this will gradually decline. So on a net basis, I think the impact will be flat. But of course it is up to how well we do in our business, please keep that in mind.

As for your first question, sorry give me a few minutes please. Sorry for that.

As for your first question about the Q4, the JPY68.6 billion of expenses in others. Q3 was JPY55 billion. So on a net basis, it's an increase of JPY13.6 billion. And the reserves for the past issues, this is booked in others within the segment Others, and it is booked in the trading P&L. And as for the JPY13.6 billion of cost increase in Q3 and Q4, this is related to the decommissioning of IT systems and also the FX losses in the asset management division.

So decommissioning of IT systems and FX loss, that's part of that segment? So these are reflected in the segment profit and loss.

Yes, that's correct, it is booked in asset management and retail divisions.

What about the cost of litigation and that's part of the others in the last line.

Yes, that's correct.

So JPY11 billion for others in the Others segment; is that correct if I remember correctly?

If you could wait for a moment. Yes, negative JPY11 billion, that's included as well.

So valuation gains on subsidiaries, I think there was some of that in the third quarter last fiscal year, what was the situation?

As for the bank subsidiaries and also the bonds owned by the affiliate companies, yes, there -- we did book a loss in Q4 and that is included in others in segment Other.

So if everything was included, it was negative?

Yes, that's correct.

Thank you. Understood.

Yamanaka, Credit Suisse Securities.

Just one question from me please. This may be somewhat of an overlap with your previous answers but based on what you have said for the full career retirement and the expenses for the ongoing litigations and also Q4 being somewhat exceptionally good. If you look at the total international segment, the JPY50 billion annual target does not seem that far off or far away. So could you just go over the current situation about that please?

So what you mentioned in the third and the fourth quarters, well, our profitability in AEJ starting from the second quarter, we believe that that is sustainable to a certain extent. And if there is going to be no major negative impact from anything else considering the current level of profitability, we do believe that JPY50 billion is a target that is very much achievable. but we are reliant on the wholesale business meaning that we depend on market conditions, in particular, fixed income, so fixed income rates and credit spreads, all depends on those conditions. And are we going to go after risk excessively? No.

Thank you.

David Lui, Guoco Management.

Yes, thanks. Congratulations Kashiwagi for a great set of results for the March quarter. I have two or three questions here, the first one is from page 7 of your presentation, page 7. The title is Retail: Reached March 2016 recurring revenue target early.

Could you tell me, there is a number there for net inflows of cash and securities of negative JPY137.3 billion; could you shed some light on why there was a negative number here when the market was pretty positive, favorable for the securities firms in Japan, and yet you experienced some fairly sizeable outflow of cash and securities. Thank you. That's my first question.

Okay, can I answer the first question first. By the way hello, how are you?

Good. How are you?

So let me -- regarding the cash outflow from retail division, unfortunately I have to admit this is a very normal -- when it comes to the March 31st which is the financial year end. A lot of the cash moves back due to some of the (inaudible) deposit, that's what my suspicion of the -- this is a very normal phenomenon.

As a matter of fact, most of the cash outflow happened during the March; January and February, we have seen an increase of the cash into our accounts. And partially it was exaggerated, the fact that the -- towards the end of March that we do have a strength of the market. So there was a profit taking. And some of the corporate account shift to their cash out of the Nomura account to the banking account.

Thank you. Let me move on to the second question, it's on page 22 of your presentation, at the bottom part of the slide for the fourth quarter you are showing that the pretax income for Asia excluding Japan of JPY10.3 billion which is about little bit close to 9% of the total of JPY105 billion. Of course these are very good results and for two quarters in a row as you pointed out in your comments.

Could you breakdown this JPY10.3 billion into global markets versus investment banking for the Asia excluding Japan geographical segment? Thank you.

I think I have to -- the majority of that revenue PTA is coming from the global markets. Aside from the global markets, we do have a small profit from the wealth management division in Asia and also the revenue -- net PTI from the Taiwan broker dealer operation. I don't think that accounts for more than 10% of this number in aggregate.

Okay, thank you. My last question is on the potential reserves also which someone asked before. With regard to the situation in Italy, is it fair to say that you have not made any provision yet for the Italian situation, and do you think that it's imminent that you may have to start making provisions there?

It's our policy not to comment on the specific in legal cases. And the -- but meantime, one thing I can say to you is that including everything as far as we know we took everything in terms of the reserving the money for the possible litigation as of the March 31, 2015.

Okay, thank you Kashiwagi. Congratulations once again on a great set of results for the March quarter.

Koichi Niwa, SMBC Nikko Securities.

I would like to ask about the retail division and also the international business a question each. For retail, I am looking at page 7. In Q4, the discretionary investment monthly average of JPY115.8 billion; how do you see that figure and also how do you assess the current situation? Could you talk about the discretionary investment business in domestic retail? And also in terms of March 2016, are you ready to raise your targets?

My second question is somewhat overlapping with some of the previous questions, but the JPY50 billion target for March 2016, which means JPY12.5 billion per quarter, and the AEJ outlook seems quite firm, but what about the Americas and EMEA, what is your outlook? Could you -- so basically I would like to know the regional geographical breakdown of the JPY50 billion target? Thank you.

Yes, first on our fund wrap business. In August, we made an announcement last year, or rather it was in December when we made the announcement. Fund wrap balance as well -- from the balance in October, we are going to increase by JPY3.1 trillion in the next five years and our net increase that we are experiencing right now exceeds the pace that we have planned.

JPY3.1 trillion, let's say that we achieved that number and it depends on our market share. But balance in the US, JPY3.97 trillion or JPY500 trillion. Well that's the number given. In light of that I think we still have ample room to grow.

And as far as the current conditions are concerned, they continue to be robust and very favorable. And we are not thinking of revising our target for the time being.

And on international business JPY12.5 billion per quarter, if you divide by 4, and AEJ is starting to look very good. And there may be some of you who remember but one year ago I was skeptical about the AEJ business. So we don't have a clear picture as to what the breakdown should be, but we would like to continue to have diversified portfolio in terms of products and regions; otherwise, we will not be able to meet the JPY50 billion target. At this moment, in terms of the profitability, AEJ is going to be most profitable.

Thanks very much for the clear answer.

[Tanaka], Morgan Stanley MUFG Securities.

My name is Tanaka from Morgan Stanley MUFG Securities, thank you very much for your presentation on the performance. And my questions may overlap with the ones that has been raised, but just one point, in the fourth quarter, you have provision to reserve for the litigation cases, but page 10 and page 22 when we look at those slides, in the Americas, JPY30 billion Q-on-Q, or rather JPY2.4 billion or rather JPY24 billion investment. On the other hand, if we look at page 22, pre-tax income, in terms of the pre-tax income, it has not grown as much as the top line, so why the gap?

Page 10, JPY26.8 billion of revenues in EMEA and [increase to] JPY65 billion, there is increase in the topline. On page 22, the increase in income is only JPY2 billion. So how should we view the litigation cost going forward, if you could share that with us.

Okay, as for the first point about the Americas. I may be wrong, but on page 10 this is the management accounting basis. And within Americas, this includes the litigation expenses in trading expenses, but in terms of the segment it's booked in the other segment.

So, as for the table on page 10, this does not include the provisions for the litigation. Meanwhile on page 22, the figures do include the provisions or the reserves for litigation.

Another point is on page 22, the supply is not just to wholesale but also to asset management. This also has the asset management earnings. And in the Americas, we have quite a sizable asset management business and the figures for that are included on page 22.

As for the EMEA revenues, JPY39 billion on page 10, there is growth of JPY39 billion, but there is only JPY18.2 billion growth on page 22. This is because, as mentioned earlier, page 10 is management accounting. So the traders in EMEA have done business and they have generated revenue. However, there are cases where some of the revenue is booked in other geographies such as at the Americas or maybe in Japan as well.

Another thing to point out is that page 22, this includes CBA and OCV, so there is a gap of JPY10 billion quarter on quarter which is another reason for the difference between page 10 and page 22.

Understood, thank you.

(Operator Instructions)

Thank you, this is Kashiwagi again. Thanks for participating so late in the evening.

Looking over the past fiscal year, March 2015, there are some things which we have left undone. But generally speaking, I think it was a good year and we have made progress in what we wanted to do and we are starting to see the results of these efforts.

For example, in retail, just a year ago, when we had this conference call, I think we talked about PTI of JPY22.2 billion in retail, and there was a question about some of the retail business that some confusion in the retail branches. But actually we have done very well in focusing on the advisory functions and we are starting to see good results.

For asset management, we have been helped by the market growth. But as we saw in our presentation our share has grown and as the top broker, I think we are achieving good result -- I am quite confident about the good results we are achieving.

Lastly, for wholesale, we continue to maintain a dominant position in Japan. Meanwhile, the AEJ business has been launching and improving. As for EMEA, there was a very unfortunate incident in Q3 but we have replaced some of the people in positions and we have also shrunk our unprofitable businesses.

So I think we are ready to, in March 2016, to achieve the JPY50 billion in overseas profits, and also make further progress in retail asset management to achieve the JPY100 EPS target, and we look forward to your continued support. Thank you.

Thank you for your time. And this concludes today's 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.