Nomura Targets Doubling of Profit by 2030 Through Wealth Management Expansion

Nomura Holdings aims to nearly double its pre-tax profit to over 500 billion yen by 2030 through wealth management expansion in Japan and Asia. The company targets 129 trillion yen in assets under management and plans to cut costs and increase its presence in Asia.

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Aqsa Younas Rana
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Nomura Targets Doubling of Profit by 2030 Through Wealth Management Expansion

Nomura Targets Doubling of Profit by 2030 Through Wealth Management Expansion

Nomura Holdings Inc., Japan's largest brokerage firm, has unveiled an ambitious plan to nearly double its pre-tax profit to over 500 billion yen (approximately $3.2 billion) by 2030. The company aims to achieve this goal through a significant expansion of its wealth management business in Japan and Asia, setting a target of 129 trillion yen in assets under management.

Why this matters: Nomura's growth strategy has significant implications for the financial industry in Japan and Asia, as itseeks to double its profit and capitalize on emerging market opportunities and diversify its revenue streams. The success of its plan could influence the competitive landscape and shape the future of wealth management in the region.

CEO Kentaro Okuda presented the company's vision for "reaching for sustainable growth" to investors on May 14, 2024. Nomura's growth strategy focuses on several key areas, including generating self-funding profit in the wholesale business, reducing costs, expanding wealth management, and increasing its presence in Asia.

The wholesale arm, which includes investment banking and trading, aims to cut its cost-to-income ratio from 94% to 80% by March 2031. Nomura also plans to expand its assets under management in international wealth management, targeting more than 35 billion in the medium term and 60 billion in the long term. The company has set its sights on breaking into the top 15 wealth managers in Asia, competing with established players like UBS Group AG and DBS Group Holdings Ltd.

Nomura's current fiscal year target is a combined pre-tax profit of 288 billion yen across its three main business segments. The company also aims to increase its return on equity (ROE) from last fiscal year's 5.1% to 8-10%. Nomura has identified India and the Middle East as growth regions, with plans to invest in its onshore platform in India and hire specialist sales in the Middle East.

The announcement of Nomura's ambitious targets comes on the heels of a significant earnings revival, marking the first annual profit increase since CEO Kentaro Okuda assumed his role in 2020. However, the company still faces challenges in managing elevated costs within its wholesale division. "We are positioning this year as an important one to achieve even better results," Okuda stated. "At the same time, it is exactly at times like these that we must launch new initiatives to create a foundation for future sources of income. We can't stand still."

Nomura's strategic growth plan aims to diversify its revenue streams and capitalize on emerging market opportunities. By focusing on wealth management expansion and improving profitability in its wholesale business, the company seeks to establish a strong foundation for sustainable growth in the coming years. As Nomura embarks on this ambitious journey, the financial industry will closely monitor its progress and the impact of its strategies on the competitive landscape in Japan and Asia.

Key Takeaways

  • Nomura aims to double pre-tax profit to ¥500 billion by 2030.
  • Targeting ¥129 trillion in assets under management in Japan and Asia.
  • Expanding wealth management business, cutting costs, and increasing Asian presence.
  • Aiming to break into top 15 wealth managers in Asia, competing with UBS and DBS.
  • Targeting 8-10% return on equity (ROE) and reducing cost-to-income ratio to 80%.