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1. Maintaining robust financial position 2. 3. Initiatives to improve ROE Shareholder returns
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Finance May 10, 2010 Masafumi Nakada Chief Financial Officer 1 . - - PowerPoint PPT Presentation
Finance May 10, 2010 Masafumi Nakada Chief Financial Officer 1 . - - PowerPoint PPT Presentation
Finance May 10, 2010 Masafumi Nakada Chief Financial Officer 1 . Maintaining robust financial position 2 . Initiatives to improve ROE 3 . Shareholder returns 2 Robust Financial Position Capital Ratio History of Leverage Ratios (Balance
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Robust Financial Position
Total assets ¥32.2trn
Shareholders’ equity ¥2.1trn
Gross leverage 15.2x
Net leverage 9.3x
Level 3 assets (net)1 ¥0.9trn
Liquidity ¥5 2trn
(billions of yen) (Preliminary) 31 Dec 31 Mar Tier 1 1,989 2,000 Tier 2 559 560 Tier 3 303 306 Total capital 2,789 2,806 RWA 11,127 11,525 Tier 1 ratio 17.8% 17.3%
(Balance sheet data)
Financial Indicators Gross Leverage and Net Leverage
Capital Ratio History of Leverage Ratios
15.2 9.3
8.0 10.0 12.0 14.0 16.0 18.0 20.0
Gross leverage ratio Net leverage ratio
Nomura MS GS Citi JPM BoA CS UBS DB BARC
Liquidity ¥5.2trn
Tier 1 Common ratio3 17.7% 17.3% Total capital ratio 25.0% 24.3%
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Tier 1 capital / Risk Weighted Assets 2 Total Assets
Comparison of Capital Ratios Balance Sheet
= Tier 1 ratio = Tier 1 common ratio3
1. Preliminary (before review). 2. Competitor data in gray dotted area as of March 31, 2010, and others as of December 2009.Nomura data as of March 31, 2010. 3. Tier 1 common ratio is defined as Tier 1 capital minus hybrid capital and minority interest.
6.0 2009.1Q 2009.2Q 2009.3Q 2009.4Q 2010.1Q 2010.2Q 2010.3Q 2010.4Q 17.3%17.3%
5 10 15 20 25 30 35 40 FY05 FY06 FY07 FY08 FY09 （Trillion yen）
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Maintaining Robust Balance Sheet
Long term funding
A l t di ifi ti
Liabilities
Increase long-term funding
Gross leverage
Around 20x
Liquidity
Maintain sufficient liquidity
Assets Tier 1 Ratio
Maintain around 10% Accelerate diversification in terms of currencies and regions Around 20x Highly liquid trading assets
Net level 3 assets
Maintain 50% level
- f Tier 1 capital on net
basis
[As of March 2010 (As of March 2009)]
Liquidity: ¥ 5.2 trillion (¥ 2.4 trillion)
Trading assets: 45% of total assets (46%)
Net level 3 assets: 44% vs. Tier 1 (123%)
Gross leverage: 15.2X (16.1X)
(Long term debt + Equity) / Unsecured debt: 79% (76%)
Funding outside Japan: 22% of long term funding
Tier1 ratio: 17.3% (11.3%) 4
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Maintaining robust financial position 1. Initiatives to improve ROE Shareholder returns
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2. 3.
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Components of ROE
Financial leverage
15.5x
Net revenue / total assets
4.0%
Net income / net revenue
5.9%
ROE
3.7% × × =
Year ended March 2010 (Actual)
Note: Total assets and shareholders’ equity are averaged for the period.
Medium Term Target Financial leverage
Around 20x
Net revenue / total assets
4.0%
Net income / net revenue
12.5%
ROE
10% × × =
6
= > = > = >
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Financial leverage, allocation of management resource
Financial leverage: Maximum 20x Total assets ¥32.2 trillion Financial leverage 15.2x Balance Sheet Management
(As of March, 2010)
Allocation plan of capital raised (medium term) Emerging, others 50 billion yen US business build out 200 – 250 billion yen Expansion of client business in AEJ, Shareholders’ equity ¥2.13 trillion ¥32.2 trillion Additional allocation framework of balance sheet (medium term) , EMEA 100 - 150 billion yen 7
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Division Region
FI EQ AEJ Japan Americas EMEA
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Improve net revenue / total assets Increase asset turnover Ensure decent profitability Dispose of non-performing assets
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400 600 800 1,000 1,200 (billions of yen) 607 852 688 1,046 1,093
Cost control to improve net income / net revenue
10% accounting costs of net revenue in year ended March 2010 Cost reduction mainly in personnel expenses
Adjustments
Own credit & CVA (¥73.9bn)
Nomura CB conversion cost s (¥17.0bn)
Unrealized gain on investment securities ¥9.4bn
Nomura public offering fee (¥16.0bn)
200
FY05 FY06 FY07 FY08 FY09
100 200 300 400
FY08 4Q FY09 1Q 2Q
Comp and Benefits Commisions and floor brokerage Information processing and communications Occupancy and related depreciation Business development Other 326 267 273 257 249
(billions of yen)
105.2 118.6 223.8
Income before income taxes Income before income taxes (business segments) Adjustment
Decline in year ending March 2011
9
3Q 4Q
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Maintaining robust financial position 1. Initiatives to improve ROE Shareholder returns
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2. 3.
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Shareholder Returns
Basic policy: Sustainable growth of shareholder value and dividends. Dividends: Strive to pay stable dividends using a consolidated payout
ratio of 30% as a key indicator.
Take into account a comprehensive range of factors such as the tightening of
Basel regulations and other changes to the regulatory environment as well as the company’s consolidated financial performance.
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