Nomura Q3 profit seen up as buoyant Tokyo stocks lift fees
* Q3 net profit seen at 17.4 bln yen vs 10.2 bln year ago
* Stock gains to boost profits but costs of expansion eyed
* Results due at 3 p.m. (0600 GMT) in Tokyo
TOKYO, Feb 2 (Reuters) - Nomura Holdings , Japan's biggest brokerage, is expected to post a gain in profits as a rise in fees from stock and bond trading at home helped it outweigh the cost of expanding overseas.
Although Nomura has expanded rapidly in Asia and Europe and is hiring in the United States, stock and bond trading fees at home still account for its biggest chunk of revenue.
The benchmark Nikkei 225 gained 9.2 percent in the most recent quarter compared with a 7.3 percent rise in the Dow Jones industrial average in New York and a 6.3 percent increase in London's FTSE benchmark .
After buying a big chunk of floundering Lehman Brothers in 2008, Nomura must now find ways to control costs to help comply with tighter financial capital requirements looming and in order to match the better profitability of U.S. securities houses such as Goldman Sachs , said, Azuma Ohno, a brokerage analyst at Credit Suisse Securities.
Nomura offered many of its new employees guaranteed bonuses to keep them leaving after the Lehman deal and is now facing an increasingly tough battle to attract banking talent, particularly in Asia.
Four analysts surveyed by Thomson Reuters have a consensus forecast of 17.4 billion yen ($214 million) in net profit for the three months to December 31. That compares with net income of 10.2 billion yen a year ago, and 1.1 billion yen last quarter.
For the full business year to end-March, year the average net income prediction of eight analysts is for 36.7 billion in profit, about half of the 67.8 billion yen it made a year ago. Nomura, unlike most Japanese corporations, does not release its own forecast.
By buying Lehman's Asian and European operations and choosing to vie for business in the United States, Nomura has chosen a riskier path than its main domestic rival, Daiwa Securities Group .
Rather than compete globally with the elite of investment banks, such as Goldman Sachs or Morgan Stanley Japan's No. 2 brokerage is instead aiming only to turn itself into a major regional Asian financial company.
Daiwa's new president, Takashi Hibino, who will run the brokerage from April 1, warned Tuesday that expanding through big mergers was risky for financial firms. "Our business is people and the risk is people will leave," Hibino said at a news conference in Tokyo.
Nomura has seen its own stock rise more than a quarter since the end of September, in line with Daiwa and outperforming the Nikkei.
Nomura will announce its third quarter results at 3 p.m. (0600 GMT) in Tokyo. ($1 = 81.33 Japanese Yen) (Reporting by Tim Kelly; Editing by Lincoln Feast)
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