July 29, 2020 / 7:19 AM / 12 days ago

Nomura delivers second-best quarter since 2002 on steep cost cuts

TOKYO (Reuters) - Nomura Holdings Inc (8604.T), Japan’s biggest brokerage and investment bank, turned in its second-best quarterly profit in almost two decades as it continues to slash costs as part of its efforts to turn around its business.

FILE PHOTO: FILE PHOTO: A logo of Nomura Holdings is pictured in Tokyo, Japan, December 1, 2015. REUTERS/Toru Hanai/File Photo

Its April-June profit rose to 142.5 billion yen (1.05 billion pounds) - its second-biggest earnings since 2002 - from 55.8 billion yen a year ago.

Pretax income for Nomura’s wholesale segment, which serves corporations and institutional investors, jumped more than four-fold to 87.9 billion yen.

The stellar quarter comes after a dismal January-March showing when it reported its first loss in over a year as COVID-19 battered global stock markets.

“It was good quarterly results ... We will proceed with cost-cutting measures and review our business portfolio,” Chief Financial Officer Takumi Kitamura said on an earnings conference call on Wednesday.

Nomura has been in a heavy cost-cutting mode for the past year, targeting about 140 billion yen in cuts by March 2022. More than 70% of the plan had been achieved as of end-June.

NEW COMMUNICATION STYLE

Nomura’s asset management division posted 19.2 billion yen of pretax income, up 6% on year, while its retail division raked in 15.1 billion yen - an 86% surge despite a suspension of over-the-counter business at its branches for a month amid virus-related curbs.

CEO Kentaro Okuda, who took the helm in April, aims to more than double pretax income in the retail business over three years from 49.4 billion yen in fiscal 2019.

Even before the pandemic, Nomura’s sales people had started moving away from their face-to-face sales style to email and phone calls to grow business, Kitamura told reporters.

The pandemic, which has led to a lack of face-to-face interaction between bankers and customers, is testing how strong these relationships are.

“I’ve gradually got used to communicating with customers online. My sales performance has been recovering, compared to the three months through May,” a Nomura sales person said on condition of anonymity.

Reporting by Takashi Umekawa, Editing by Sherry Jacob-Phillips and Himani Sarkar

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