FORM 6-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

Commission File Number: 1-15270

For the month of July 2025

NOMURA HOLDINGS, INC.

(Translation of registrant’s name into English)

13-1, Nihonbashi 1-chome

Chuo-ku, Tokyo 103-8645

Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  X    Form 40-F    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):    

 

On June 23, 2025, Nomura Holdings, Inc. filed its Annual Securities Report for the year ended March 31, 2025 with the Director of the Kanto Local Finance Bureau of the Ministry of Finance pursuant to the Financial Instruments and Exchange Act.

Information furnished on this form:

EXHIBITS

Exhibit Number

 

1.		English translation of certain items disclosed in the Annual Securities Report pursuant to the Financial Instruments and Exchange Act for the fiscal year ended March 31, 2025.
2.		English translation of Management’s Report on Internal Control over Financial Reporting and Confirmation Letter.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

		NOMURA HOLDINGS, INC.
Date: July 18, 2025		By:		/s/ Yoshifumi Kishida
				Yoshifumi Kishida
				Senior Managing Director

EXHIBIT 1

Annual Securities Report Pursuant to the Financial Instruments and Exchange Act for the Fiscal Year Ended March 31, 2025

Table of Contents

 

		Page
PART I  Corporate Information			2
Item 1. Information on the Company and Its Subsidiaries and Affiliates			2
1. Selected Financial Data			2
2. History and Development of the Company and Its Subsidiaries and Affiliates
3. Business Overview			4
4. Subsidiaries and Affiliates
5. Employees			5
Item 2. Operating and Financial Review			7
1. Management Challenges and Strategies			7
2. Views on Sustainability and efforts			12
3. Risk Factors			19
4. Operating, Financial and Cash Flow Analyses by Management			35
5. Significant Contracts			68
6. Research and Development, Patent and Licenses, etc.
Item 3. Property, Plants and Equipment
1. Results of Capital Expenditure
2. Our Properties
3. Prospects of New Capital Expenditure, Abandonment and Other
Item 4. Company Information			69
1. Share Capital Information			69
2. Stock Repurchase			76
3. Dividend Policy			77
4. Status of Corporate Governance and Other*			78
Item 5. Financial Information			129
1. Consolidated Financial Statements and Other			130
2. Unconsolidated Financial Statements			264
Item 6. Information on Share Handling, etc.
Item 7. Reference Information
PART II  Information on Guarantor of the Company
Report of Independent Auditors			277

An English translation of the underlined items above is included in this document.

* Status of Directors and Senior Management in Item 4.4. Status of Corporate Governance and Other is not translated.

 

1

PART I Corporate Information

Item 1. Information on the Company and Its Subsidiaries and Affiliates

1. Selected Financial Data.

(1) Selected consolidated financial data for the latest five fiscal years.

 

Year ended March 31		2021				2022				2023				2024				2025
Total revenue (millions of yen)			1,617,235				1,593,999				2,486,726				4,157,294				4,736,743
Net revenue (millions of yen)			1,401,872				1,363,890				1,335,577				1,562,000				1,892,485
Income before income taxes (millions of yen)			230,671				226,623				149,474				273,850				471,964
Net income attributable to Nomura Holdings, Inc. (“NHI”) shareholders (millions of yen)			153,116				142,996				92,786				165,863				340,736
Comprehensive income attributable to NHI shareholders (millions of yen)			141,077				309,113				283,267				307,393				328,560
Total equity (millions of yen)			2,756,451				2,972,803				3,224,142				3,448,513				3,580,999
Total assets (millions of yen)			42,516,480				43,412,156				47,771,802				55,147,203				56,802,170
Shareholders’ equity per share (yen)			879.79				965.80				1,048.24				1,127.72				1,174.10
Net income attributable to NHI common shareholders per share—basic (yen)			50.11				46.68				30.86				54.97				115.30
Net income attributable to NHI common shareholders per share—diluted (yen)			48.63				45.23				29.74				52.69				111.03
Total NHI shareholders’ equity as a percentage of total assets (%)			6.3				6.7				6.6				6.1				6.1
Return on shareholders’ equity (%)			5.73				5.10				3.06				5.10				9.99
Price/earnings ratio (times)			11.60				11.04				16.52				17.78				7.88
Cash flows from operating activities (millions of yen)			667,610				(862,832	)			(694,820	)			132,640				(678,611	)
Cash flows from investing activities (millions of yen)			257,932				(593,182	)			(233,225	)			(887,938	)			(848,647	)
Cash flows from financing activities (millions of yen)			(668,725	)			1,112,718				1,283,937				1,012,850				1,679,697
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of the year (millions of yen)			3,510,011				3,316,408				3,820,852				4,299,022				4,425,441
Number of staffs			26,402				26,585				26,775				26,850				27,242
[Average number of temporary staffs, excluded from above]			[4,224	]			[4,339	]			[4,420	]			[4,234	]			[4,268	]

1	The selected financial data of Nomura Holdings, Inc. and its consolidated subsidiaries (“Nomura”) were stated in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

2	Shareholders’ equity per share, Total NHI shareholders’ equity as a percentage of total assets, Return on shareholders’ equity are calculated using Total NHI shareholders’ equity.

 

3	Certain contract employees are included in Number of staffs.

 

2

(2)	Selected stand-alone financial data for the latest five fiscal years

 

Year ended March 31,		2021				2022				2023				2024				2025
Operating revenue (millions of yen)			328,625				355,487				472,321				557,326				665,643
Ordinary income (millions of yen)			88,992				114,577				121,963				83,720				140,679
Net income (loss) (millions of yen)			(1,508	)			176,470				174,264				90,548				132,675
Common stock (millions of yen)			594,493				594,493				594,493				594,493				594,493
Number of issued shares (thousands of shares)			3,233,563				3,233,563				3,233,563				3,163,563				3,163,563
Shareholders’ equity (millions of yen)			2,510,710				2,546,193				2,578,102				2,540,897				2,576,011
Total assets (millions of yen)			7,891,346				8,985,161				9,514,679				10,626,780				11,082,445
Shareholders’ equity per share (yen)			819.55				843.62				858.21				855.20				871.28
Dividend per share (yen)			35.00				22.00				17.00				23.00				57.00
[Interim dividend per share](yen)			[20.00	]			[8.00	]			[5.00	]			[8.00	]			[23.00	]
Net income (loss) per share (yen)			(0.49	)			57.60				57.95				30.01				44.89
Net income per share—diluted (yen)			—				55.86				55.95				28.79				43.26
Shareholders’ equity as a percentage of total assets (%)			31.7				28.3				27.1				23.9				23.2
Return on shareholders’ equity (%)			(0.06	)			7.00				6.81				3.54				5.19
Price/earnings ratio (times)			—				9.22				9.11				33.96				20.99
Payout ratio (%)			—				37.98				29.30				75.85				127.00
Dividend on shareholders’ equity (%)			4.28				2.64				1.98				2.70				6.54
Number of staffs			154				187				167				185				177
[Average number of temporary staffs, excluded from above]			[—	]			[ —	]			[—	]			[—	]			[—	]
Total Shareholder Return (%)			134.6				125.0				127.5				234.7				232.0
[Comparison index with the above : TOPIX Total Return Index]			[142.1	]			[145.0	]			[153.4	]			[216.8	]			[213.4	]
Highest stock price (yen)			721.0				614.8				573.9				1,006.0				1,080.0
Lowest stock price (yen)			402.5				460.3				464.3				476.7				656.8

1	The dividend per share for the fiscal year ended March 31, 2025 includes a commemorative dividend of 10 yen for the 100th anniversary of the company’s founding.

 

2	Number of staffs represents staffs who work at the Company.

 

3	Stock prices are quoted on the Tokyo Stock Exchange (First Section or Prime Market of the Tokyo Stock Exchange).

 

4	No net income per share—diluted information was provided, as there was net loss per share, although there are dilutive shares for the years ended March 31, 2021.

 

5	No Price/earnings ratio (times) or payout ratio was provided due to the net loss for the years ended March 31, 2021.

 

3

3. Business Overview.

The Company and its 1,537 consolidated subsidiaries and variable interest entities primarily operate investment and financial services business focusing on securities business as their core business. Nomura provides wide-ranging services to customers for both of financing and investment through the operations in Japan and other major financial capital markets in the world. Such services include securities trading and brokerage, underwriting and distribution, arrangement of public offering and secondary distribution, arrangement of private placement, principal investment, asset management, banking, and other securities and financial business. There are also 14 companies accounted for under the equity method as of March 31, 2025.

The reporting of the business operations and results of the Company and its consolidated subsidiaries are based on business segments referred in Note 21 “Segment and geographic information” in our consolidated financial statements included in this annual report. Please refer to the table below in the organizational structure listing the main companies by business segments.

Organizational Structure

The following table lists Nomura Holdings, Inc. and its significant subsidiaries and affiliates by business segments.

Nomura Holdings, Inc.

Wealth Management Division

(Domestic)

Nomura Securities Co., Ltd. and others

Investment Management Division

(Domestic)

Nomura Asset Management Co., Ltd. and others

Wholesale Division

(Domestic)

Nomura Securities Co., Ltd.

Nomura Financial Products & Services, Inc.

Nomura Asia Pacific Holdings Co., Ltd. and others

(Overseas)

Nomura Holding America Inc.

Nomura Securities International, Inc.

Nomura America Mortgage Finance, LLC

Instinet, Incorporated

Nomura Europe Holdings plc

Nomura International plc

Nomura International (Hong Kong) Limited

Nomura Singapore Limited and others

Others

(Domestic)

The Nomura Trust and Banking Co., Ltd.

Nomura Properties, Inc.

Nomura Global Finance Co., Ltd.

Nomura Research Institute, Ltd.⁽¹⁾

Nomura Real Estate Holdings, Inc.⁽¹⁾

 

(1)

Affiliates

(2)

We have newly established Banking Division, resulting in a structure consisting of four divisions as of April 1, 2025.

 

4

5. Employees

(1) Consolidated company

 

		Year ended March 31, 2025
		Number of our employees
Total		27,242 (4,268)

1

Business segments of the Nomura Group consist of three divisions: Wealth Management Division, Investment Management Division, and Wholesale Division, along with Other. In Japan, we had 7,045 employees in our Wealth Management Division, 1,127 in our Investment Management Division, 1,779 in our Wholesale Division and 4,926 in Other. In overseas, we had 12,365 employees, most of which were in Wholesale Division.

 

2	Number of our employees consists of full-time employees. The number of non-fulltime employees on annual average is in brackets, not including in number of our employees.

(2) The Company

 

						Year ended March 31, 2025
Number of our employees		Average ages		Average service years		Average annual salary
177 (—)		43 years and 9 month		4 years and 5 months		¥13,761,056

1	We had employees of the Company, most of which were in Other in business segments.

 

2	Number of our employees consists of full-time employees and the number of non-fulltime employees on annual average is in brackets.

 

3	In addition to the employees above, we had employees of 600, who belong to both the Company and Nomura Securities Co., Ltd.

 

4	Average annual salary includes bonus and non - standard salary.

(3) Nomura employees’ union

None

 

5

(4) The ratio of females in manager roles and so on

 

Subsidiaries		Ratio of female in manager roles (%) (1) (2)				Ratio of male employees taking childcare leave (%) (1) (3)				Gender pay gap (female pay gap) (%) (1) (2) (4)
										All				Permanent				Fixed Term
Nomura Securities Co., Ltd.			18.0				100.0				56.6				56.6				71.1
Nomura Asset Management Co., Ltd.			18.3				104.0				68.7				71.0				51.2
The Nomura Trust and Banking Co., Ltd.			24.5				175.0				72.4				76.8				56.4
Nomura Business Services Co., Ltd.			25.4				—				69.0				71.0				49.6
SUGIMURA WAREHOUSE Co., Ltd.			14.8				0.0				66.5				71.3				76.5
SUGIMURA TRANSPORTATION Co., Ltd.			2.2				80.0				39.6				65.0				46.5

1	The ratio of female in manager roles is as of March 31, 2025, the ratio of male employees taking childcare leave and the gender pay gaps are calculated from April 1, 2024 to March 31, 2025.

 

2	The ratio of female in manager roles and the gender pay gaps are calculated according to the Act on the Promotion of Women’s Active Engagement in Professional Life (Act No. 64 of 2015, Japan).

 

3

The ratio of male employees taking childcare leave is calculated as the ratio of childcare leave taken according to the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Act No. 76 of 1991) and Article 71-6 items (ii) of Ordinance for Enforcement of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or Other Family Members (Ordinance of the Ministry of Labor No. 25 of 1991). In companies where the number of male employees who took childcare leave in the current fiscal year exceeded the number of male employees whose spouses gave birth in the current fiscal year, the acquisition rate exceeds 100%.

 

4

At our major subsidiaries such as Nomura Securities Co., Ltd., Nomura Asset Management Co., Ltd., The Nomura Trust and Banking Co., Ltd., and Nomura Business Services Co., Ltd., a gender pay gap exists among all employees or permanent employees mainly due to the low percentage of female employees in higher corporate titles or positions which are relatively high in salary. As the percentage of female employees in higher corporate titles or positions increases, it is believed that this wage differential will shrink. Each company sets targets for the ratio of female managerial positions in their action plans to promote the active participation of women. As a common initiative in the group, we incorporate Inclusion into personnel evaluations. Specifically, for managers, efforts related to the development of female employees’ abilities, the establishment of a workplace environment that accepts diversity, and the promotion of male employees taking childcare leave and the necessary environmental adjustments are identified as essential tasks. We are continuously implementing initiatives to promote the active participation of women throughout the entire group.

(Reference) Differences in wages between male and female by corporate title at our major subsidiaries.

At Nomura Securities Co., Ltd., looking at the gender pay gap among permanent employees by seniority, it is 79.6% for exempt employees, 79.6% for non-exempt employees, 85.6% for Managing Directors, 90.0% for Executive Directors, 90.5% for Vice Presidents, 78.8% for Senior Associates, 75.1% for Associates, and 91.3% for Analysts.

At Nomura Asset Management Co., Ltd., looking at the gender pay gap among permanent employees by seniority, it is 92.4% for exempt employees and 100.6% for non-exempt employees, 94.1% for Managing Directors, 100.8% for Executive Directors, 92.1% for Vice Presidents, 92.4% for Senior Associates, 94.7% for Associates, and 98.9% for Analysts.

At The Nomura Trust and Banking Co., Ltd., looking at the gender pay gap among permanent employees by seniority, it is 97.2% for exempt employees, 97.6% for non-exempt employees, 95.3% for Managing Directors, 98.3% for Executive Directors, 101.7% for Vice Presidents, 89.4% for Senior Associates, 91.2% for Associates, and 101.9% for Analysts.

At Nomura Business Services Co., Ltd., looking at the gender pay gap among permanent employees by seniority, it is 98.8% for exempt employees, 86.0% for non-exempt employees, 97.6% for Executive Directors, 107.3% for Vice Presidents, 96.0% for Senior Associates, 97.2% for Associates, and 97.9% for Analysts.

 

6

Item 2. Operating and Financial Review

1. Management Challenges and Strategies

All matters relating to the future in the sections below are based on the current views as of the date of filing this Securities Report.

(1) Fundamental Management Policy

1. Fundamental Management Policy

In Fundamental Management Policy formulated by the Board of Directors, our company has set the following Management Vision and Basic Vision of Group Management.

Fundamental Management Policy of Nomura Holdings, Inc.

 

2. Purpose

NHI will celebrate its 100th anniversary in December 2025. As we look to the next one hundred years, Nomura Group has established a Group Purpose to underpin group management in April 2024. Nomura Group is dedicated to the tenets embodied in its Founder’s Principles and the unwavering values ingrained in its Corporate Philosophy.:

 

Since its founding, Nomura Group has strived to contribute to the development of financial markets. Amid a complex and rapidly changing environment, Nomura Group will continue to leverage its knowledge and expertise to deliver added value and create a better world through the financial markets. The Group Purpose articulates Nomura Group’s strong resolve to work together with various stakeholders to build a better future, and its determination to continue taking on new challenges to become the best company for its clients and other stakeholders.

3. Management Vision

In May 2024, we formulated a new Management Vision for fiscal 2030, “Reaching for Sustainable Growth”, with the aim of promoting management strategies in line with our Purpose. Nomura Group continues to engage in the development of the financial and capital markets and the provision of optimal solutions to our clients by facilitating the circulation of risk capital through the provision of a wide range of financial services.

(2) Business Environment

During the year ended March 31, 2025, while global inflation continued to subside, economic sentiment varied across regions, becoming a factor in market fluctuations. In the United States, temporary concerns about an economic slowdown triggered a sharp decline in global stock markets during the summer. In the November 2024 U.S. presidential election, Republican candidate Donald Trump secured victory. Initially, expectations for future tax cuts and deregulation were viewed as positive factors boosting stock prices. However, following his inauguration in January 2025, his statements regarding tariff hikes and the actual implementation of these measures occasionally triggered downward pressure on stock prices. In China, despite the continued stagnation in the real estate market, stock prices remained resilient starting in autumn, supported by expectations of economic stimulus measures driven by fiscal spending. In Europe, stock prices remained relatively weak, but since the beginning of the year, growing hopes for an end to the Russia-Ukraine war have driven notable stock price increases.

 

7

Meanwhile, in terms of monetary policy, the U.S. Federal Reserve Board (FRB) began its rate-cutting cycle in September 2024. However, with the strong U.S. economy, expectations for additional rate cuts were limited, and long-term interest rates rose from autumn into the new year. The European Central Bank (ECB) began its rate-cutting cycle in June 2024.

In Japan, the inflation rate declined toward the summer but became more persistent thereafter. The 2024 Shunto (spring wage negotiations) resulted in a 5.3% increase, and a strong trend of above 5% is expected to continue for 2025. Recognizing a strengthening virtuous cycle between wages and prices, the Bank of Japan raised its policy interest rate to 0.25% in July 2024 and further to 0.50% in January 2025. The USD/JPY exchange rate fluctuated, primarily reflecting the interest rate differential between Japan and U.S., but overall remained within a narrow range. Stock prices maintained a long-term upward trend throughout FY2024, supported by improved corporate profit margins.

(3) Management Vision

Our business environment is undergoing significant changes. We will continue to respond to it flexibly while maintaining an appropriate financial standing and effectively utilizing management resources through improved capital efficiency. In addition, we will constantly implement new initiatives with the aim of expanding existing businesses and providing value-added services to clients.

1. Medium-to Long-term Priority Issues

We are pursuing sustainable growth across the entire group and working on building a business portfolio that focuses on stable and diversified revenue and improving capital efficiency.

Our vision is to advance Nomura Group to the next stage. To realize this, we launched a strategy of expanding into private markets to complement our businesses in the public markets. Based on this strategy, we have been working on promoting our Wealth Management business, strengthening the Investment Management Division, and fostering growth and stability in the wholesale business. Additionally, we have been exploring and enhancing new areas such as Digital Financial Services including the digital asset business and sustainability sector including sustainable finance. We are promoting company-wide cost control through structural reforms. In addition, we are advancing the sophistication and efficiency of the corporate functions that form the basis of these businesses, strengthening the governance structure and risk management, evolving the human resource management strategies, further embedding our code of conduct and compliance, and improving operational efficiency using digital technologies and enhancing cybersecurity. For more information on the strategies in each division, please refer to “2. Issues in Each Division.”

As announced in May 2024, we have set a management vision, “Reaching for Sustainable Growth”, as an indication of the direction of management toward fiscal 2030, and management quantitative targets of ROE of 8-10%+ and achieving an income before income taxes of over ¥500 billion. We will focus on the following areas to achieve these goals: (i) deepen global strategy leveraging our Japan franchise, (ii) achieve sustainable growth of stable revenues, and (iii) further promote our strategy to provide platforms. In addition, we break down the Price Book-value ratio (“PBR”) as shown in the figure below. Maximizing the absolute level of ROE is one of its key elements. Through addressing medium- to long-term priority issues, we aim to enhance our corporate value.

 

 

 

8

2. Issues in Each Division

The challenges and strategies in each division are as follows:

 

•

Wealth Management Division

As a result of the continuous initiatives to overhaul our business model to further help clients manage their assets, the Wealth Management Division has seen significant changes in its revenue structure, leading to certain achievements in transitioning to the recurring revenue business. To contribute to the improvement in the ratio of securities to the total financial assets among Japanese households, our challenge is to respond to diversifying wealth management needs. By providing comprehensive wealth management services through our nationwide network of branches, as well as our digital services, we aim to assist our clients in achieving their goals. We will continue working on improving the skills of our partners (sales representatives) while maximizing our comprehensive strengths to enhance our wide range of products and services in order to advance the wealth management business.

 

•

Investment Management Division

Our Investment Management Division provides solutions that meet the diversifying investment needs of our broad clients through a wide range of assets classes and services spanning both traditional and alternative assets. We aim to realize a virtuous cycle of investment that leads to the resolution of social issues by providing high-quality investment products that meet the diverse investment needs of clients. We regard the following trends as growth opportunities: Japan’s abundant individual financial assets and the tailwind of the government’s plan for promoting Japan as a leading asset management center, the growth of investment in private assets, high levels of funding demand for and investor awareness of sustainability-related investments. Amid continued downward pressure on management fees, we are working to improve our investment capabilities, increase our assets under management and increase the value added by our products and services in our public market businesses, expand our business platforms in alternative assets and other high-fee growth areas, and realize greater efficiency and cost control.

As announced in April 2025, we have reached an agreement with Macquarie Group Limited, an Australian financial services group, to acquire 100% of the stock of three companies that operate Macquarie’s U.S. and European public asset management business for an all-cash purchase price of approximately $1.8 billion (subject to closing adjustments). The transaction is targeted to close by the end of the calendar year, subject to customary closing conditions and regulatory approvals.

 

•

Wholesale Division

Our Wholesale Division faces challenges presented by increasingly sophisticated client needs and technological advancement, coupled with uncertainty in the market and macroeconomic environment. To ensure continuity of service as well as adding value to clients, we will continue to enhance collaboration across business lines, regions and divisions while further diversifying our business portfolio to stabilize revenues. We will continue to deploy financial resources to selective and high growth opportunities and also focus on cost optimization.

Global Markets aims to provide uninterrupted liquidity to our clients while reinforcing risk control and governance. Additionally, we aim to further diversify our business portfolio, reinforce global connectivity and cross-sell across our global client franchise leveraging our solid business foundation in Japan and competitive global products to pursue growth opportunities such as Structured Financing and Solution business, International Wealth Management business as well as Global Equities, and continue to build on the strength of our Flow Macro businesses.

Investment Banking aims to provide seamless client experiences as we target to accelerate advisory services and financing to domestic and cross-border restructurings and industry-wide consolidations, as well as interest rate and foreign exchange solutions as volatile business environments impact our clients’ businesses. We have leveraged our Japanese strengths and focus on expanding our global advisory business, while also maintaining focus on sustainability in light of its importance within the industry and to our clients. Additionally, we will accelerate group-wide collaborations as we develop tailored advice for the benefit of our clients across a range of products and services.

 

•

Banking Division

We established a new Banking Division, effective April 1, 2025.

The decision to launch the new division was driven by the megatrends of inflation, the changing interest rate environment and the acceleration of movements toward the realization of Japanese government’s “Policy Plan for Promoting Japan as a Leading Asset Management Center.” Nomura Group recognized the importance of enhancing its efforts to provide a diverse range of high-quality services through its Banking businesses. The Banking Division will leverage the strengths of The Nomura Trust and Banking Co., Ltd. and Nomura Bank (Luxembourg) S.A. in private markets and bespoke products and meet the diverse needs of clients in areas such as asset building and estate planning.

 

9

•

Risk Management and Compliance, etc.

We have defined our risk appetite in our Risk Appetite Statement which includes the types and level of risk that the Nomura Group is willing to assume in pursuit of our strategic objectives and business plans. Further, we continue to develop our risk management framework in a way that is strategically aligned to our business plans and incorporates decision-making by senior management, thereby securing capital soundness and enhancing our corporate value.

We have clearly defined in our Risk Appetite Statement that all executives and employees must actively engage in risk management through our Three Lines of Defense framework. Besides, we continuously provide trainings to all executives and employees including those in the group companies to increase our knowledge about risks as financial professionals and develop a corporate culture of correctly recognizing, assessing and appropriately managing risks.

With regard to compliance, we continue to focus on improving the management structure to comply with local laws and regulations in the countries where we operate. We also continue to review our internal systems and rules so that all executive management and employees can work autonomously with high ethical standards.

So that all directors, officers and employees not only comply with laws and regulations, but also act in accordance with social norms, aiming to be a company that is truly trusted by society, with a high sense of ethics, can work with confidence and pride, we have established the “Nomura Group Code of Conduct” as guidelines for actions to be taken, and through associated trainings and other measures, we are working to promote appropriate actions (“Conduct”) based on the Code of Conduct. At the “Nomura Founding Principles and Corporate Ethics Day” held every August, we reaffirm the lessons learned from past incidents and renew our determination to prevent similar incidents to maintain and gain the trust society places in us; discussions are held regarding conduct after looking back on past incidents, and a pledge is made to comply with the Code of Conduct. The Code of Conduct is reviewed periodically to better respond to changes in the social and economic conditions surrounding Nomura Group and to the expectations of stakeholders. In 2024, as part of efforts toward the 100th year anniversary, Nomura Group established the Nomura Purpose “We aspire to create a better world by harnessing the power of financial markets”. The “Nomura Purpose Journey” project was launched to establish and further disseminate the Purpose. It emphasizes that each executive and employee should think about his or her Purpose and thoroughly discuss it with his or her subordinates, superiors, and peers. We believe that this project will provide an opportunity to reconsider “How each officer and employee should make decisions and act concretely” which is an important element of the Code of Conduct, and to further raise each employee’s awareness of the Code of Conduct.

By addressing and resolving the above issues, we will strive for the stability and further development of financial markets as well as the sustainable growth of the Nomura Group.

(Administrative Action by The Financial Services Agency)

In September 2024, the Japanese Securities and Exchange Surveillance Commission made a recommendation that the Financial Services Agency impose an administrative monetary penalty against Nomura Securities Co., Ltd. (“NSC”) for unlawful trading of Japanese government bond futures in March 2021. In October 2024, the Financial Services Agency issued an administrative monetary penalty order against NSC. In response to this, NSC has formulated and implemented measures to prevent recurrence including the Front Office prevention measures (1st Line of Defense), the Prevention measures in Compliance (2nd Line of Defense), and the Verification by Internal Audit (3rd Line of Defense) in order to further enhance our compliance framework and internal controls and to rebuild trust with our stakeholders. Also, related to this incident, in the Compensation Committee, a resolution was passed to reduce executive compensation following a request for voluntary return of compensation.

 

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(Incident Involving Former Employee)

In October 2024, a former employee of NSC was arrested by the Hiroshima Prefecture police and indicted by the Hiroshima District Public Prosecutors Office in November 2024. The Nomura Group takes these matters very seriously and emphasizes that incidents of this nature must never occur at a financial institution entrusted with safeguarding its clients’ assets. In response to this and to ensure that clients feel confident using its services, NSC has established more rigorous and effective countermeasures that are currently being implemented in order to strengthen current measures to enable early detection of misconduct and manage employees’ actions. These countermeasures consist of, among others, the establishment of the Operational Reform Promotion Committee, strengthening supervision of visits to clients’ homes, heightening monitoring of employee business activities, and extending block leave to the Wealth Management Division in order to detect wrongdoing. We have received an evaluation from external specialists regarding the adequacy of our countermeasures and confirmed that progress has been made in establishing a foundation for preventing recurrence. Also, related to this incident, at the Compensation Committee, a resolution was passed to reduce executive compensation following a request for voluntary return of compensation.

 

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2. Views on Sustainability and efforts

(1) Nomura’s Basic Views on Sustainability (Strategy)

Since its founding, Nomura has been engaged in the creation of not only economic value but also social value by circulating risk money through the provision of a wide range of financial services, developing financial and capital markets, and providing optimal solutions to clients.

Nomura sees sustainability from two perspectives: “Support the sustainability initiatives of clients and diverse stakeholders as a financial services group” and “Promotes activities such as reducing environmental impact, respecting human rights, and enhancing governance to ensure a sustainable existence for Nomura.”

For more specific initiatives, please also refer to the “Nomura Sustainability Report” scheduled for publication at the end of August 2025.

 

•

Supporting the sustainability efforts of our clients and stakeholders through business activities as a leading financial institution

Our core role as a financial services group is to support clients through the flow of funds and capital. We believe it is important to strengthen our functions to promote the sustainable circulation of capital by underwriting green bonds and social bonds issued by companies and financial institutions, providing strategic advisory services such as M&A advisory, and by developing ESG-related funds as investments and providing them to individual investors in Japan, in order for Nomura to be selected as our clients’ partner. Nomura sees financing of sustainable causes as a business opportunity to expand the range of services and solutions. In particular, in order to strengthen and promote sustainable finance initiatives, we have set a target of engaging $125 billion in sustainable finance projects in Japan and overseas over the five years ending March 31, 2026.

In addition, we seek to take advantage of the Group’s comprehensive strengths in providing solutions to social issues by leveraging the functions we have cultivated over many years, including support for business succession, promoting innovation in the fields of regional revitalization, agriculture and medical care, and our expertise and knowledge in the field of research and analysis. Nomura has been a frontrunner in providing financial education programs for people of all ages, ranging from children to adults for more than 20 years, dating back to the 1990s. As the Japanese government aims to realize a virtuous cycle of growth and distribution, in which Japan’s household savings flow more into productive investment, and the benefits of increased corporate value are returned to households, leading to further private sector investment and consumption, under its “Policy Plan for Promoting Japan as a Leading Asset Management Center”, improving financial literacy in Japan is an extremely important issue. In addition to financial education centered on school education, we will also actively seek to support asset building through the workplace for working generations, contribute to the improvement of financial literacy throughout society, and work to develop financial and capital markets through sustainable financial circulation.

 

•

The Company’s efforts to continue being a sustainable corporate group

Nomura recognizes that addressing environmental issues and respecting human rights are essential elements in the realization of a sustainable society.

Nomura has announced its goal of achieving net zero greenhouse gas (“GHG”) emissions for its own operations by 2030, and to seek to achieve net zero GHG emissions attributable to its lending and investment portfolios by 2050. To support these goals, we joined the Net Zero Banking Alliance (“NZBA”), an international framework established by the United Nations Environment Programme Finance Initiative (“UNEP FI”) in September 2021. NZBA played a role as a platform for global financial institutions to discuss and develop the framework. However, recently, countries and regions have begun to formulate and implement regulations and industrial policies tailored to their respective economic and social conditions in order to achieve a decarbonized society. In light of these circumstances, in March 2025, we withdrew from NZBA membership. At the same time, we are focused on circulating funding and capital to enable the transition, as well as on supporting our clients based on the characteristics of each region.

In accordance with the Nomura Group Human Rights Policy, Nomura Group is actively working to improve and enhance its efforts to address human rights issues and promote respect for human rights through the development of various systems and the implementation of training programs. These efforts are regularly discussed by the Sustainability Committee, which is described below, and efforts are made to disclose appropriate information.

In order to put our Group Purpose into action and to maximize our corporate value, the evolution of human resource management strategies is essential. For this reason, Nomura is working to differentiate the human resource management cycle of recruitment, talent development, performance appraisal, and mobility and advancement strategies, deepening “Conduct,” “Inclusion” and “Well-being”. We are working to build a cycle in which people, who are the source of Nomura’s competitiveness, play an active role and provide high added value. (For details, please refer to “(5) Human Capital Initiatives”.)

 

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(2) Nomura’s Sustainability-Related Governance

Nomura is a Company with Three Board Committees under Japanese law, separating management oversight and business execution to strengthen corporate governance. The oversight function and the executive side play respective roles in recognizing climate change risks and opportunities, promoting various measures, and managing risks.

① Board of Directors

The Board of Directors offers advice on sustainability related reports prepared by executive officers, based on our basic sustainability policy which states: “Nomura will contribute to the creation of a truly enriched society through our business activities based on the principles embodied in the Nomura Group Corporate Philosophy, and actively pursue initiatives to resolve social issues and create a sustainable world.” In the year ended March 31, 2025, we dealt with topics such as the disclosure of sustainability-related information, regulations and business practices.

② Sustainability Committee

Nomura has established the Sustainability Committee chaired by the Group CEO and which also consists of other persons designated by the Group CEO including the members of the Executive Management Board to deliberate and make decisions on strategies to promote sustainability. The Chief Sustainability Officer leads discussions in the Sustainability Committee to consolidate the company’s sustainability knowledge and accelerate the formulation and promotion of strategies. In the year ended March 31, 2025, we covered topics such as the establishment of NHI Green Issuance Framework, Nomura Group Materiality, efforts to achieve net zero and the establishment of Sustainable Innovation Investment Scheme.

③ Sustainability Forum

In order to ensure opportunities for more flexible and substantive discussions on sustainability, the Sustainability Forum, as a forum for discussion by executives from across departments and regions, was established in the year ended March 31, 2024. This forum is an evolutionary reformation of the Sustainability Council, established in August 2021, and is divided into the Sustainability Business Forum, which deals with topics more closely related to business activities, and the Sustainability Corporate Forum, which deals with information disclosure and policy formulation. The forum has a flexible structure, such as inviting the additional participant member depending on the topics covered. In the year ended March 31, 2025, we discussed the content of NHI Green Issuance Framework and the interim target of reducing GHG emissions in our investment and loan portfolio.

(3) Nomura’s Risk Management on Sustainability

Increasing attention to the management of Sustainability matters makes it imperative that we continue to develop policies and capabilities in these areas, and that we position ourselves in a positive light to interested stakeholders including our shareholders, clients and society at large. Amid rapidly changing circumstances around Sustainability, lack of sufficient considerations for Sustainability in business activities may also adversely affect our reputation, results of operations and financial condition. In particular, we recognize that climate change risks are likely to have an impact over the medium to long term, and we seek to manage these risks under appropriate management systems.

① Recognition of the Risks Associated with Climate Change

Nomura recognizes risks arising from changes in the environment due to climate change and identifies the potential impact on our business. There are two types of risks associated with climate change: the risk of loss or damage due to extreme weather events such as large typhoons, droughts, and intense heat (physical risk), and the risks associated with decarbonization, such as the inability to respond to changes in government policies or rapid technological innovations (transition risk). Nomura recognizes the following physical and transition risks associated with climate change.

 

•

Risk that clients will not adequately respond to climate change, resulting in financial damage, decline in creditworthiness and inability to fulfil their contractual obligations

 

•

Risk that climate change causes market fluctuations and losses are incurred due to fluctuations in the market price of Nomura’s financial assets

 

•

Risk of reputational damage if Nomura and counterparties fail to respond appropriately to climate change

 

•

Risk of financial losses or reputational damage due to inadequate or failed internal processes and employee response to climate change

 

•

Risk of inadequate strategies or failed execution of strategies as compared with competitors, and risk of gap between strategies and resources

 

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② Our approach on Risks Associated with Climate Change

Climate risk is recognized as one of risks that are understood to potentially impact the firm significantly if they materialize. Climate risk is not recognized as an independent risk, but is understood to be a risk factor affecting various risk areas. Nomura has built an integrated risk management framework that manages the risks caused by climate change by adding new controls into the existing risk management frameworks.

(4) Metrics and Targets

Nomura Group uses metrics related to greenhouse gas emissions to measure and manage the risks and opportunities associated with climate change, with the approval of the Sustainability Committee, as well as to steadily implement initiatives to align with the Paris Agreement and achieve net zero. The progress is also reported regularly to the board of directors. The result for each metric for the year ended in March 2025 will be disclosed in the “Nomura Sustainability Report” and the integrated report scheduled to be issued at the end of August 2025.

 

#		Metrics		Target		Results (FY2022/23)		Results (FY2023/24)
1		Greenhouse gas emissions from its own operations (Scopes 1 and 2) (*1)		Net Zero by 2030		Scope1 : 2,473 t-CO2 Scope2 : 24,183 t-CO2		Scope1 : 2,423 t-CO2 Scope2 : 19,504 t-CO2
2		Greenhouse gas emissions from its lending and investment portfolios (Scope 3, Category 15)		Net Zero by 2050		Power generation sector GHG emissions: 4,662 kt CO2e Economic emission intensity: 3,422 t-CO2e/$m   (As of the end of March 2023)		Power generation sector GHG emissions: 4,516 kt CO2e Economic emission intensity: 2,477 t-CO2e/$m   (As of the end of March 2024)
3		Sustainable financing (*2)		US$125bn in sustainable financing over five years by March 2026		US$25.1 bn		US$28.5 bn

 

(*1)

Scope 2 emissions are calculated using the market-based method based on the GHG Protocol. The market-based method is a method of calculating Scope 2 emissions reflecting companies’ electricity contract. As the emission factor is based on the contractual terms, if a company purchases low-carbon electricity, such as from renewable energy sources, the effect can be reflected.

 

(*2)

This target includes capital raised through Nomura’s debt and equity capital markets businesses, private placements of mezzanine debt and equity securities, and debt financing through its Infrastructure and Power Financing Group. The cumulative amount from the year ended March 31, 2022 to the year ended March 31, 2024 was US$75 bn.

(Factors considered in each goal setting)

 

•

Regarding the Greenhouse gas emissions from its own operations, targets are set based on comprehensive consideration of the results of energy conservation efforts, the spread of renewable energy, and the ratio of installed renewable energy.

 

•

Regarding the Greenhouse gas emissions from its lending and investment portfolios, targets are set by referring to the International Energy Agency’s NZE scenarios and the emission factor database provided by PCAF.

 

•

Regarding the Sustainable financing, target is set by referring to the assumed market size of sustainable finance provided by external vendors.

(5). Human Capital Initiatives

① Putting our Purpose into action and Maximize Our Corporate Value through the Evolution of Human Resources Management Strategy

We have declared our Group Purpose as “we aspire to create a better world by harnessing the power of financial markets”. In order to put our Group Purpose into action and to maximize our corporate value, we seek to improve our return on equity (ROE) through investing strategically for growth. We believe it is essential to enhance the competitive strength of our employees (human capital) in order to enhance productivity, build value for our clients and shareholders, and enrich our risk management culture by realizing the potential of our dedicated and professional workforce.

Through improving employee engagement with the long-term evolution of our human resources management strategy, we aim to differentiate the intellectual capital ⁽¹⁾ that our human capital delivers as a team and further enhance the added value provided by the Nomura Group.

(1) Our intellectual capital refers to the intangibles that are the source of our competitiveness, including organizational capabilities, know-how, customer networks, and branding.

 

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② Nomura Group’s Human Resources Management Strategy

Our human resources management strategy is based on the values of “Entrepreneurial Leadership,” “Teamwork,” and “Integrity” as defined in our corporate philosophy, and these core values set us apart from our competitors in our recruitment, talent development, performance appraisal, and mobility and advancement strategies, as well as our dedication to deepening “Code of Conduct,” “Inclusion,” and “Well-being.” This strategy forms the core of our recruitment, talent development and retention initiatives. We have decided to establish the Leadership Behaviors Model that sets out five behaviors that we expect of everyone at Nomura, which are “Explore insights & visions,” “Make strategic decisions,” “Inspire entrepreneurship in people,” “Elevate organizational capability,” and “Inclusion.” The Leadership Behaviors Model will be integrated into various human resources management strategies.

a. Recruitment

Our recruitment strategy centers on acquiring talent that shares our core values of “Challenge,” “Collaboration,” and “Integrity” in alignment with our Purpose practice. We seek individuals who possess a strong risk culture, which is vital for effective risk management. To acquire and develop professional talent that consistently seeks new added value, we implement departmental or job-specific recruitment across all regions, including Japan, for both new graduate and mid-career hiring.

We also place significant emphasis on mid-career hiring, recognizing the need for diverse talent with advanced knowledge and expertise in specialized areas. In the past few years, over half of our new hires have been mid-career professionals.

In January 2023, we launched a system to connect with our alumni (former employees) and actively promote their re-employment while fostering connections with those engaged in other fields. As of March 31, 2025, approximately 290 users have registered on our networking site, reflecting an increase of about 40 since the previous year. We are committed to further utilizing this network to strengthen our community.

b. Talent Development

Under the Basic Policy of Talent Development listed below, we are committed to developing our talent.

<Basic Policy of Talent Development>

In order to put into action our Group Purpose, “we aspire to create a better world by harnessing the power of financial markets,” we aim for Nomura Group people to differentiate themselves by being a professional group that continually takes on challenges to create new added value.

We aim to create a self-sustaining decentralized organization in which every single employee has a high level of expertise and leadership. To achieve this, we have reorganized our training programs by hierarchy for new employees, instructors, and managers, and are working to enhance departmental expertise through department-specific training and to promote self-directed career development through enriched self-selection training.

As an example of the self-selection training, we launched our Digital IQ University program in fiscal year 2023. This program enables employees, regardless of whether they are involved in IT operations, to systematically acquire a wide range of knowledge and skills related to digitalization. Additionally, in department-specific training, for example, in our Wholesale Division, we provide a knowledge management platform called “M&A University.” By utilizing this platform, employees can learn specialized knowledge in M&A advisory services and apply it in practical work.

Additionally, we are implementing various selective training programs. Specifically, the following programs are available:

Study Abroad Support Program—For more than 60 years, we have offered tuition assistance programs to employees in Japan in order to support their self-improvement goals through study abroad programs.

Startup training program—We launched our Startup training program in order to provide our employees with work experience at startup companies in Japan. Through this program, we encourage employees to gain experience outside of the Nomura Group and promote a culture of accepting diverse values when they return to the Nomura Group.

Nomura Keiei-juku—We have offered our in-house senior management development program in Japan. The participants, who are selected from the entire Nomura Group, have opportunities to have discussions with senior executives to gain exposure to their perspectives and to deepen their own vision, self-awareness, and determination as candidates of future management.

 

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Nomura Management School—We send senior executives to executive programs operated by external educational institutions. By providing participants with the opportunity to enroll in high-quality executive education programs led by world-class instructors who are experts in various fields, including top-tier instructors from overseas universities, we are focusing on successor development.

c. Performance Appraisal

To deliver on the Nomura Group Purpose, in all regions including Japan, and across all departments and roles, we are making further efforts to enhance our performance-based compensation system, through ensuring the fairness of performance appraisal and benchmarking employee productivity against external market data. All managers in Japan paid by job type.

We have also introduced 360-degree feedback globally, and by engaging in dialogue between the target and the evaluators regarding the results, we are supporting the growth and leadership development of the target. Additionally, we have implemented the ERCC rating⁽²⁾.

(2) Evaluation of Ethics, Risk Management, Compliance and Conduct.

d. Mobility and Advancement

We respect employees’ entrepreneurial mindsets and encourage autonomous career development. While we had a global internal job posting system in place before, we significantly expanded the scope of this system in Japan starting from the year ended March 31, 2021. Regardless of corporate title, many employees have actively applied to this system across departmental boundaries, enabling them to pursue new career opportunities through job rotations.

Additionally, from the perspective of appointing talent to key positions within the group and developing successors for such positions, we globally manage a talent pool of individuals with the potential to assume critical roles. Assessments are conducted for these talent pools, and various leadership development programs are provided to the respective employees based on their leadership potential.

③ Fostering Corporate Culture

We are engaged in fostering our corporate culture by embedding the Code of Conduct, promoting Inclusion and Well-being. To verify and improve the effectiveness of our talent management strategy, we have been conducting the “Nomura Group Employee Survey” since fiscal year 2013, and starting in fiscal year 2023, we have implemented a “Pulse Check Survey” that conducts awareness surveys quarterly on randomly selected employees. By analyzing these initiatives, we aim to connect the results to new measures through a PDCA cycle, focusing on enhancing employee engagement.

 

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In April 2025, we established a Culture & Engagement Division. The Culture & Engagement Division will promote the cultivation of a positive corporate culture across the group and aims to enhance employee engagement.

 

 

a. Code of Conduct

We not only comply with laws and regulations but also strive to ensure that all employees act in accordance with social norms. To guide the appropriate behavior expected of our members, we have established the “Nomura Group Code of Conduct” and promote proper conduct based on this code through training and other initiatives. Every year in August, on “Nomura Day of Founding Philosophy and Corporate Ethics,” we collectively reaffirm the lessons learned from past scandals. This includes initiatives aimed at preventing recurrence and maintaining and gaining the trust of society and our customers. We reflect on past misconduct, engage in discussions on proper conduct, and pledge to adhere to the Nomura Group Code of Conduct. Since its formulation in December 2019, the Nomura Group Code of Conduct is annually reviewed to better respond to changes in the social and economic landscape surrounding the Nomura Group and the expectations of our stakeholders.

b. Inclusion

We believe that diversity, represented by our employees from approximately 90 nationalities working across 30 countries and regions at Nomura, helps improve our competitiveness, innovation, and advanced risk management. In July 2016, we adopted our “Declaration on Diversity and Inclusion” initiative and have since been committed to enhancing our work environment through measures such as introducing hourly paid leave and a partnership program. We believe that ‘diversity strengthens an organization’ at the core of our values and aim to create a workplace where each of us feels a sense of belonging when we are valued and respected for who we are. To promote this, our Working Group, which consists of Executive Officers, Senior Managing Directors, heads of group companies and global regions, aims to create such a work environment across the group using a top-down approach. Additionally, our Employee Network, is composed of employee who participate voluntarily and engages in diversity awareness-raising activities at Nomura offices worldwide through a bottom-up approach.

Starting in fiscal year 2024, the promotion of inclusion has been incorporated into the performance management system for all employees and executives worldwide, with the aim of deepening their understanding of inclusion in the workplace and encouraging them to contribute to creating a better work environment.

In Japan, initiatives such as the “Parental Leave Incentive Bonus,” implemented across domestic subsidiaries (with certain exceptions, such as joint ventures), have encouraged male employees to take continuous parental leave of one month or more.

Additionally, approximately 15,000 employees in Japan participated in the “Nomura Group Inclusion Training” as part of greater human rights awareness efforts, aiming to make “Inclusion” a personal matter and to gain a deeper understanding of minority issues. We will continue to seek to foster an inclusive environment where everyone can realize their full potential.

c. Well-being

We recognize the importance of our employees’ physical, emotional, mental and financial well-being so that they can realize their full potential, stay motivated and excel in the performance of their duties. We seek to improve its employee welfare programs, such as childcare and nursing care support, as well as to maintain and promote employee health, so that employees can continue to work with enthusiasm, including the development of appropriate working conditions and a comfortable working environment.

 

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We also recognize the need to reduce Absenteeism ⁽¹⁾ and Presenteeism ⁽²⁾, and improve Work Engagement ⁽³⁾ and have set the following measurements in order to monitor employee well-being:

 

 

 

		Measurements (4)												Targets (4) (Year ending March 31, 2026)
		Year ended March 31, 2023				Year ended March 31, 2024				Year ended March 31, 2025
Absenteeism (millions of yen)(1)			794.7				794.7				759.7				—
Presenteeism (%)(2)			16.1				16.4				17.9				10
Work Engagement(3)			53.7				53.3				53.7				60

(1)

Absenteeism: The impact of absenteeism is measured by financial losses due to absence from work coursed by injury or illness, calculated by multiplying the average compensation of employees for such financial year by the number of employees and the utilization rate of sick leave. While our objective is to reduce this by promoting well-being initiatives, it is also essential to establish an environment where employees can easily take leave when experiencing health issues. Therefore, at this stage, we will refrain from setting specific targets and will instead focus on careful monitoring.

 

(2)

Presenteeism: A condition in which individuals go to work despite being ill or experiencing symptoms of illness, with negative impacts on business execution and productivity. The figure is calculated based on responses to the SPQ (Single-Item Presenteeism Question, Tokyo University 1-Item Version), a measurement scale developed by the University of Tokyo. Specifically, it is determined by averaging the responses obtained from the health awareness survey and subtracting this average from 100%.

 

(3)	Work Engagement: A positive, fulfilling, work-related state of mind. This is measured based on deviation from the results of the national average of annual stress assessment, which is an annual mandatory workplace program in Japan to screen for mental health issues in workers.

 

(4)	The Target figures are for the Nomura Group, and the Measurement figures are for NSC, our major consolidated subsidiary.

We also support the financial well-being of our global employees by offering various programs that contribute to asset formation, such as an employee stock ownership plan, a defined contribution pension plan, and Workplace Tsumitate NISA. We have also implemented an incentive system for contributions to the employee stock ownership plan and Workplace Tsumitate NISA. To enable employees to make more effective use of these systems, we began providing video content (Nomura Financial Wellness Program) in fiscal year 2023 through NSC, and in fiscal year 2024 through other domestic subsidiaries, allowing employees to quickly deepen their understanding of retirement benefits and pension systems.

 

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3. Risk Factors

You should carefully consider the risks described below before making an investment decision. If any of the risks described below actually occur, our business, financial condition, results of operations or cash flows could be adversely affected. In that event, the trading prices of securities of NHI could decline, and you may lose all or part of your investment. In addition to the risks listed below, risks not currently known to us or that we now deem immaterial may also harm us and affect your investment.

INDEX

● Risks Relating to the Business Environment

 

1	Our business may be materially affected by financial markets, economic conditions and market fluctuations in Japan and elsewhere around the world, including the ones caused by geopolitical events

 

(1)

Governmental fiscal and monetary policy changes in Japan, or in any other countries or regions where we conduct business may affect our business, financial condition and results of operations

 

(2)

Extended market declines and decreases in market participants can reduce liquidity and lead to material losses

 

(3)

Natural disaster, geopolitical event and infectious disease could adversely affect our business

 

2	The financial services industry faces intense competition

 

(1)

Competition with other financial firms and financial services by non-financial companies is increasing

 

(2)

Increased consolidation and reorganization, business alliance and cooperation in the financial services industry mean increased competition for us

 

(3)

Our global business continues to face intense competition and may require further revisions of our business model

 

3	Event risk, including the ones caused by geopolitical events, may cause losses in our trading and investment assets as well as market and liquidity risk

 

4	Sustainability factors including climate change and broader associated policy changes in each jurisdiction could adversely affect our business

● Risks Relating to Our Businesses

 

5	Our business may incur losses due to various factors in the conduct of its operations

 

(1)

We may incur significant losses from our trading and investment activities

 

(2)

Holding large and concentrated positions of securities and other assets may expose us to significant losses

 

(3)

Our hedging strategies may not prevent losses

 

(4)

Our risk management policies and procedures may not be fully effective in managing risk

 

(5)

Market risk may increase other risks that we face

 

(6)

Our brokerage and asset management revenues may decline

 

(7)

Our investment banking revenues may decline

 

6	We may be exposed to losses when third parties do not perform their obligations to us

 

(1)

Defaults by a large financial institution could adversely affect the financial markets generally and us specifically

 

(2)

There can be no assurance as to the accuracy of the information about our credit risk, or the sufficiency of the collateral we use in managing it

 

(3)

Our clients and counterparties may be unable to perform their obligations to us as a result of political or economic conditions

 

7	We are exposed to model risk, i.e., risk of financial loss, incorrect decision making, or damage to our credibility arising from model errors or incorrect or inappropriate model application

 

8	NHI is a holding company and depends on payments from its subsidiaries

 

9	We may not be able to realize gains we expect, and may even suffer losses, on our investments in equity securities and non-trading debt securities

 

10	We may face an outflow of clients’ assets due to losses incurred within cash reserve funds or debt securities we offer to clients

 

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● Risks Relating to Our Financial Position

 

11	We may have to recognize impairment losses with regard to the amount of goodwill, tangible assets and intangible assets recognized on our consolidated balance sheets

 

12	Liquidity risk could impair our ability to fund operations and jeopardize our financial condition

 

(1)

We may be unable to access unsecured or secured funding

 

(2)

We may be unable to sell assets

 

(3)

Lowering of our credit ratings could impact our funding

 

13	Equity investments in affiliates and other investees accounted for under the equity method in our consolidated financial statements may decline significantly over a period of time and result in us recognizing impairment losses

● Risks Relating to Legal, Compliance and Other Operational Issues

 

14	Operational risk could adversely affect our business

 

15	Reputational risk could adversely affect our business

 

16	We may identify a material weakness in our internal control over financial reporting, indicating that our internal control over financial reporting may not be effective

 

17	Misconduct, fraud or other criminal activity by an employee, director or officer, or any third party, could occur, and our reputation in the market and our relationships with clients could be harmed

 

18	A failure to identify and appropriately address conflicts of interest could adversely affect our business

 

19	Our business is subject to substantial legal and regulatory risks

 

(1)

Legal liability related to our business may occur and could adversely affect our business, financial condition and results of operations

 

(2)

Extensive regulation of our businesses limits our activities and may subject us to significant penalties and losses

 

(3)

Tightening of regulations applicable to the financial system and financial industry could adversely affect our business, financial condition and results of operations

 

(4)

Deferred tax assets may be impacted due to a change in business condition or in laws and regulations, resulting in an adverse effect on our operating results and financial condition

 

(5)

Defects in our anti-money laundering and counter-terrorism financing measures could have serious consequences such as, administrative penalties or punitive fines

 

20	Unauthorized disclosure or misuse of personal information held by us may adversely affect our business

 

21	System failure, information leakage and cost of maintaining sufficient cybersecurity could adversely affect our business, financial condition and results of operations

 

22	Our business may be adversely affected if we are unable to hire, retain and develop qualified personnel

 

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● Risks Relating to the Business Environment

1. Our business may be materially affected by financial markets, economic conditions and market fluctuations in Japan and elsewhere around the world, including the ones caused by geopolitical events

Our business and revenues may be affected by any adverse changes or volatility in the Japanese and global economic environments and financial markets. In addition, not only purely economic factors but also military dispute, acts of terrorism, economic or political sanctions, pandemics, forecasts of geopolitical risks and geopolitical events which have actually occurred, natural disasters or other similar events could have an effect on the financial markets and economies of each country. If any adverse events including those discussed above were to occur, a market or economic downturn may last for a long period of time, which could adversely affect our business and business continuity readiness, and can result in us incurring substantial losses. In addition to conditions in financial markets, social conditions such as the long-term trends of population aging and population decline faced by Japan are expected to continue to put downward pressure on demand in the businesses in which we operate. The following are certain risks related to the financial markets and economic conditions for our specific businesses.

(1) Governmental fiscal and monetary policy changes in Japan, or in any other countries or regions where we conduct business may affect our business, financial condition and results of operations

We engage in our business globally through domestic and international offices. Governmental fiscal, monetary and other policy changes in Japan, or in any other countries or regions where we conduct business may affect our business, financial condition and results of operations. In addition, any changes to the monetary policy of the Bank of Japan or central banks in major economies worldwide, which could potentially lead to volatility of interest rate or yields may negatively affect our ability to provide asset management products to our clients as well as our trading and investment activities. Recently, the Bank of Japan ended its negative interest rate policy in March 2024, and further raised the rate in July 2024 and January 2025. While so far, such changes have not materially affected our business, the future of the Bank of Japan’s policies and the potential effect of such changes on our business remain uncertain. Furthermore, due to policy shifts resulting from the change of government in the United States in 2025, as well as defeats of ruling parties in many countries in national level elections held in 2024, there is an increasing uncertainty regarding policy changes. The impact on our business from the broader risks posed by increased uncertainty is unclear.

(2) Extended market declines and decreases in market participants can reduce liquidity and lead to material losses

Extended market declines can reduce the level of market activity and the liquidity of the assets traded in those markets in which we operate. Market liquidity may also be affected by decreases in market participants, for example, if financial institutions scale back market-related businesses due to increasing regulation or other reasons. As a result, it may be difficult for us to sell, hedge or value such assets. In the event that a market fails in pricing such assets, it will be difficult to estimate their values. If we cannot properly close out or hedge our associated positions in a timely manner or in full, particularly with respect to Over-The-Counter (“OTC”) derivatives, we may incur substantial losses. Further, if the liquidity of a market significantly decreases and the market becomes unable to price financial instruments held by us, this could lead to unanticipated losses.

We have established a risk management system that measures these market risk and liquidity risk on a daily basis and takes immediate actions if the pre-set limits are exceeded.

(3) Natural disaster, geopolitical event and infectious disease could adversely affect our business

We have developed a business continuity plan for addressing unexpected situations and conduct crisis management exercises which include employee notification tests. This includes the establishment of an emergency command center in the event of an actual disaster to ensure the safety of our officers, employees and others, prevent the expansion of damages, and maintain our business continuity readiness. We also continue to ensure that we can maintain operational resilience (which refers to the ability to continue to provide important business services at a minimum level that should be maintained in the event of a system failure, cyberattack or natural disaster). However, events such as natural disasters, geopolitical events or infectious diseases could exceed the assumptions of our plan and our framework, and we may not always be able to respond to every situation. As a result, our officers and employees may become unable to execute their duties, and our facilities, systems, or communication networks may not function, adversely affecting our business continuity management. Moreover, Japan, where Nomura has its group head office, is prone to natural disasters such as earthquakes and tsunamis. For example, analyses by the Japanese government in 2024 showed a significant probability of severe earthquakes affecting Tokyo and other major metropolitan areas in Japan occurring within the next 30 years. Geopolitical events include cases such as armed conflict or heightened military tensions, acts of terrorism, political instability, and trade fragmentation.

 

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2. The financial services industry faces intense competition

Our businesses are intensely competitive, and are expected to remain so. We compete on the basis of a number of factors, including transaction execution capability, our products and services, innovation, reputation and price. We continue to experience intense price competition, particularly in brokerage, investment banking and other businesses.

(1) Competition with other financial firms and financial services by non-financial companies is increasing

We face intense competition in the financial services sector from a wide variety of competitors. We compete with other independent securities firms as well as securities firms affiliated with commercial banks and with firms that have broad footprints across regions. As a result, our market shares and commissions earned in the sales and trading, investment banking and Wealth Management businesses in particular have been affected. We face intense competition beyond the traditional financial sector based on the increasing digitalization of the industry, not only with the rise of online securities firms but also FinTech companies and the entry of non-financial companies into the financial services sector. In order to address such changes in the competitive landscape, we continue to adopt and transform our business models through various measures. However, these measures may not be successful in growing or maintaining our market share in this increasingly fierce competitive environment, and we may lose business or transactions to our competitors, harming our business and results of operations.

(2) Increased consolidation and reorganization, business alliance and cooperation in the financial services industry mean increased competition for us

There has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of large commercial banks and other broad-based large financial services groups have established or acquired broker-dealers or have consolidated with other financial institutions. These large financial services groups have developed business linkage within their respective groups in order to provide comprehensive financial services to clients, offering a wide range of products, including loans, deposit-taking, insurance, brokerage, asset management and investment banking services within their group, which may enhance their competitive position compared with us. They also have the ability to supplement their investment banking and brokerage businesses with commercial banking and other financial services revenues in an effort to gain market share. In addition, the financial services industry has seen collaboration beyond the borders of businesses and industries, such as alliances between commercial banks and securities companies outside of the framework of existing corporate groups and recent alliances with non-financial companies including emerging companies. Our competitiveness may be adversely affected if our competitors are able to expand their businesses and improve their profitability through such business alliances. We also enter into strategic alliances, make investments and launch new businesses. However, if the development and implementation of these business strategies do not proceed as expected, we may not be able to achieve the expected synergies and other benefits or recoup related investments. These new business initiatives and acquisitions may subject us to increased risk as we engage in new activities, transact with a broader array of clients and counterparties and expose ourselves to new asset classes and new markets.

(3) Our global business continues to face intense competition and may require further revision of our business model

We continue to believe there are significant opportunities in the international markets, but there is also significant competition associated with such opportunities. In order to take advantage of these opportunities, we will have to compete successfully with financial services firms based in important non-Japanese markets, including the U.S., Europe and Asia. We have been working to rebuild our global business platform, under which we aim to transform our business portfolio and pivot towards client businesses and growth areas. The acquisition of Greentech Capital, LLC (“Greentech”) in 2020 and sale of stake of Capital Nomura Securities Public Company Limited in 2023 are examples of reviewing our business platform both organically and inorganically. We will continue to review our entire business portfolio while looking at the competitive environment, and intend to implement our strategies in consideration of potential risks. However, the risk remains that we may be required to incur greater costs and expenses than we expect, or to commit greater financial, management and other resources to the strategies than we expect, which could adversely affect our business and results of operations. Moreover, the assumptions and expectations upon which these strategies are based may not be accurate, which could lead to us realizing fewer benefits or synergies than we expect or could even harm our business and results of operations. Furthermore, to the extent we reduce compensation or headcount as part of this strategy, our ability to attract and retain the employees needed to successfully run our businesses could be adversely affected. We may also be unsuccessful in designing a streamlined management structure, which could harm our ability to properly control or supervise our many businesses across the world.

 

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3. Event risk, including the ones caused by geopolitical events, may cause losses in our trading and investment assets as well as market and liquidity risk

Event risk refers to potential losses we may suffer through unpredictable events that cause large unexpected market price movements such as natural or man-made disasters, epidemics, acts of terrorism, military disputes or political instability, as well as adverse events specifically affecting our business activities or counterparties. These events include not only significant events such as the COVID-19 pandemic in 2020, the invasion of Ukraine by the Russian Federation in 2022, and the geopolitical tensions in the Middle East but also more specifically the following types of events that could cause losses in our trading and investment assets:

 

•

sudden and significant reductions in credit ratings with regard to financial instruments held by our trading and investment businesses by major rating agencies,

 

•

sudden changes in trading, tax, accounting, regulatory requirements, laws and other related rules which may make our trading strategy obsolete, less competitive or no longer viable, or

 

•

an unexpected failure in a corporate transaction in which we participate resulting in us not receiving the consideration we should have received, as well as bankruptcy, deliberate acts of fraud, and administrative penalty with respect to the issuers of our trading and investment assets.

4. Sustainability factors including climate change and broader associated policy changes in each jurisdiction could adversely affect our business

We consider climate change one of the most important global challenges facing society. The direct impact of climate change (physical risk), and the resulting changes in the business environment (transition risk) could cause us to incur losses.

In addition, increasing attention to the management of sustainability matters such as decarbonization, enhancement of corporate governance, and the resolution of social issues in our business makes it imperative that we continue to develop policies and capabilities in these areas, and that we act responsibly towards our stakeholders, including our shareholders, clients and society at large. However, amid rapidly changing circumstances around sustainability, there may be cases where we are deemed a lack of sufficient focus on sustainability matters such as the environment or human rights in our business activities, and we may not be able to provide sufficient support to clients facing trends such as the just transition to a low carbon economy or other sustainability-related initiatives. Furthermore, there may be cases where our disclosure of sustainability-related information is insufficient, where we are unable to adequately respond to the strengthening of regulations and the diversification of policies, or where it is perceived as such, and where it is evaluated that we are not adequately fulfilling our social responsibilities.

In such cases, there is a possibility that our reputation, results of operations and financial condition may be adversely affected.

 

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● Risks Relating to Our Businesses

5. Our business may incur losses due to various factors in the conduct of its operations.

(1) We may incur significant losses from our trading and investment activities

We maintain trading and investment positions in fixed income, equity and other markets, both for the purpose of facilitating our clients’ trades and for proprietary purposes. Our positions consist of various types of assets such as interest rates, currency, credit, securitized products and equities, including securities, derivatives, repo as well as loan transactions. Fluctuations in the markets where these assets are traded can adversely affect the value of our positions. Although we continue to mitigate these position risks with a variety of hedging techniques, we may also incur losses if the value of these assets fluctuates or if the financial system is overly stressed and the markets move in a way we have not anticipated. In addition, prices of crypto-assets may fluctuate significantly due to various factors such as developments in the industry or in regulation of crypto assets.

Our businesses have been, and may continue to be, affected by changes in market volatility levels. Certain of our trading businesses such as those engaged in trading and arbitrage opportunities depend on market volatility to generate revenues. Lower volatility may lead to a decrease in business opportunities which may affect the results of operations of these businesses. On the other hand, while higher volatility can increase trading volumes, it also increases risk as measured by Value-at-Risk (“VaR”). Higher volatility and wider bid offer spreads may expose us to higher risks in connection with our market-making and proprietary trading businesses, and can also cause us to reduce the outstanding positions or size of these businesses where we consider necessary.

While we have implemented multiple measures designed to improve our risk management activities in response to the U.S. Prime Brokerage Event *, given that our business model involves significant trading activity, we may record significant losses as a result of such trading activity again in the future.

Furthermore, we commit capital to take relatively large positions in connection with our underwriting or warehousing assets to facilitate certain capital market transactions. We also structure and take positions in pilot funds for developing financial investment products and invest seed money to set up and support financial investment products. We may incur significant losses from these positions in the event of significant market fluctuations.

In addition, if we are the party providing collateral in a transaction, significant declines in the value of the collateral or a requirement to provide additional collateral due to a decline in our creditworthiness (by way of a lowered credit rating or otherwise) can increase our costs and reduce our profitability. On the other hand, if we are the party receiving collateral from our clients and counterparties, such declines may also affect our profitability due to decrease in client transactions. See also “—Risks Relating to Our Financial Position—12. Liquidity risk could impair our ability to fund operations and jeopardize our financial condition—(3) Lowering of our credit ratings could impact our funding”.

 

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* U.S. Prime Brokerage Event:

We entered into certain transactions with a prime brokerage client in the United States comprising (i) total return swaps (the “TRS transactions”), which are transactions that allow the client to obtain synthetic (i.e., derivative) long or short exposure to underlying individual equities or indices, as well as (ii) providing financing against a portfolio of securities in the client’s cash prime brokerage account. To manage credit risk in relation to prime brokerage clients, we require that prime brokerage clients deposit collateral (referred to as “margin”) in respect of their positions with us in accordance with the margin ratios applied to them. These margin ratios are determined based on the results of an internal risk assessment of the specific client and the composition of the client’s positions and may require that they post additional margin based on the effect of market movements on these ratios. TRS transactions are hedged from a market risk perspective by holding long or short positions in individual equities or indices and through derivative transactions, depending on the positions taken by the relevant client.

Between January and March 2021, transaction amounts and volumes with the client increased significantly as a result of changes in market prices as well as new positions entered into by the client. However, in March 2021, the market value of certain securities in which the client held a large synthetic position experienced a sharp decline, after which we requested that the client deposit additional margin with us pursuant to our contractual agreements with the client. The client defaulted on its obligation to post additional margin, and we issued a closeout notice to the client. It became clear that the client had similar large positions with other financial institutions, and that the client had also defaulted on margin calls with these financial institutions. Although we endeavored to take a disciplined approach to unwind the positions and liquidate the hedges for the TRS transactions, taking into account both market impact and our own trading losses, due to the significant volume of positions being closed by both us and the other affected financial institutions and the effect on market prices, we recognized ¥204.2 billion of losses in earnings reported within Net gain on trading in the fourth quarter and the year ended March 31, 2021. We also recognized additional provisions for current expected credit losses of ¥41.6 billion in earnings reported within other expenses in the fourth quarter and the year ended March 31, 2021 against loans extended to the client collateralized by a cash portfolio of securities, reflecting the reduced likelihood of recovery on these lending transactions. All of the positions with the client were closed out and hedges liquidated by May 17, 2021, as a result of which we recognized losses of ¥65.4 billion in the quarter ended June 30, 2021 and the year ended March 31, 2022, of which ¥56.1 billion booked in Equities revenues as trading loss and ¥9.3 billion booked as loan loss provision in expenses.

(2) Holding large and concentrated positions of securities and other assets may expose us to significant losses

We regularly hold large and concentrated positions of certain securities in our businesses such as market-making, block trading, underwriting, asset securitization, prime brokerage, or providing business solutions to meet our clients’ needs. We have committed substantial amounts of capital to these businesses. This often requires us to take large positions in the securities of a particular issuer or issuers in a particular industry, country or region. Fluctuations in the prices of these positions can significantly affect the prices at which we are able to liquidate them when needed, resulting in us incurring significant trading losses, as occurred in the U.S. Prime Brokerage Event. We generally have higher exposure to counterparties engaged in financial services businesses, including commercial banks, broker-dealers, clearing houses, exchanges and investment companies.

(3) Our hedging strategies may not prevent losses

We use a variety of financial instruments and strategies to hedge our exposure to financial risks arising from the financial instruments we enter into for our clients or for proprietary purposes. If our hedging strategies are not effective, we may incur losses. We base many of our hedging strategies on historical trading patterns and correlations. For example, if we hold an asset, we may hedge this position by taking a position in another asset which has, historically, moved in a direction that would offset a change in value of the former asset. However, historical trading patterns and correlations may not continue, as seen in the case of past financial crises, and these hedging strategies may not be fully effective in mitigating our risk exposure because we are exposed to all types of risk in a variety of market environments. Moreover, not all hedging strategies are effective, and certain strategies may, if the risk is not otherwise appropriately managed, increase our risk. For example, many of the transactions leading to the U.S. Prime Brokerage Event entailed providing the client with TRS transactions exposure to certain equities. In order to hedge the total return payments, we were obligated to make to the client, we held long positions in the underlying equities. However, this specific hedging strategy was not intended to hedge the risk of a default by the client and the potential need to liquidate the underlying positions in a volatile market environment. When such unhedged counterparty risk is realized, our hedging strategy of holding the underlying securities means that we are exposed to such market fluctuations, which may cause us to incur losses again in the future.

 

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(4) Our risk management policies and procedures may not be fully effective in managing risks

Our policies and procedures to identify, monitor and manage risks may not be fully effective. Although some of our methods of managing risk are based upon observed historical market data, future movements in the financial markets may not be the same as was observed in the past. As a result, we may suffer significant losses through unexpected future risk exposures. Other risk management methods that we use also rely on our evaluation of information regarding markets, clients or other matters, which is publicly available or otherwise accessible by us. This information may not be accurate, complete, up-to-date or properly evaluated, and we may be unable to properly assess our risks, and thereby suffer large losses. Furthermore, certain factors, such as market volatility, may render our risk evaluation model unsuitable for a new market environment. In such event, we may become unable to evaluate or otherwise manage our risks adequately. Moreover, regardless of how well policies and procedures are designed, they must be properly implemented and followed in order to be effective, which may not always occur despite our diligent efforts. Further, potential weaknesses in our organization structures and governance frameworks may lead to misunderstanding roles and responsibilities.

For example, with respect to the U.S. Prime Brokerage Event, we incurred significant losses through exposures to the client’s counterparty risk and market risks relating to the securities underlying the prime brokerage transactions with the client. We have reviewed and are in the process of completing a number of actions to comprehensively review, revise and strengthen our risk management policies and procedures and the implementation thereof. While these actions are nearly complete, even when all the actions are completed, may not be sufficient to prevent similar exposure to such risks in the future, including to identify and rectify potential shortcomings, whether within the same business or among our many other business units, impairing the ability of such policies and procedures to prevent future losses.

(5) Market risk may increase other risks that we face

In addition to the potentially adverse effects on our businesses described above, market risk could exacerbate other risks that we face. For example, the risks inherent in financial instruments developed through financial engineering and innovation may be increased by market risk.

Also, if we incur significant trading losses caused by our exposure to market risk, our need for liquidity could rise sharply while our access to cash may be impaired as a result of market perception of our credit risk.

Furthermore, in a downturn in the market overall or for specific securities, our clients and counterparties could incur significant losses or experience other adverse events of their own, thereby weakening their financial condition and, as a result, increasing the credit risk they pose to us, such as occurred as part of the U.S. Prime Brokerage Event.

(6) Our brokerage and asset management revenues may decline

A market downturn could result in a decline in the revenues generated by our brokerage business because of a decline in the volume and value of securities that we broker for our clients. Also, within our asset management business, in most cases, we charge fees for managing our clients’ portfolios that are based on the market value of their portfolios. A market downturn that reduces the market value of our clients’ portfolios would reduce the revenue we receive from these businesses and might increase the number of withdrawals or reduce the number of new investments in these portfolios. Also, any changes in our clients’ investment preference on their asset portfolios, including shifting investment assets to deposits which are stable assets and passive funds which generate lower fee revenue, may also result in a decline in our revenues.

(7) Our investment banking revenues may decline

Changes in financial or economic conditions would likely affect the number and size of transactions for which we provide securities underwriting, financial advisory and other investment banking services. Our investment banking revenues, which include fees from these services, are directly related to the number and size of the transactions in which we participate and would therefore decrease if there are financial and market changes unfavorable to our investment banking business and our clients.

 

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6. We may be exposed to losses when third parties do not perform their obligations to us

Our counterparties are from time to time indebted or otherwise owe certain obligations (such as with regards to the posting of collateral) to us as a result of transactions or contracts, including loans, commitments to lend, other contingent liabilities and derivative transactions. We may incur material losses when our counterparties default or fail to perform on their obligations to us due to their filing for bankruptcy, a deterioration in their creditworthiness, lack of liquidity, operational failure, an economic or political event, repudiation of the transaction or for other reasons. The U.S. Prime Brokerage Event, during which a U.S. prime brokerage client defaulted on obligations to us to post additional margin in respect of trading activities as well as to repay amounts lent against collateral held by us, is an example. Separately, in the year ended March 31, 2024, the Company recorded a loss of approximately ¥14 billion due to a failure to settle transactions between a subsidiary of the Company and a broker in the U.K. Although we establish and maintain allowances for credit losses, such allowances reflect management judgments and assumptions based on information available to us, which may provide incorrect or incomplete, and these judgments and assumptions may prove to be incorrect, potentially significantly so.

We are also exposed to credit risk from holding securities issued by third parties as well as through the execution of securities, futures, currency or derivative transactions that fail to settle at the required time due to non-delivery by our counterparties such as financial institutions and hedge funds, or to systems failure by clearing agents, exchanges, clearing houses, etc.

Issues related to third party credit risk may include the following:

(1) Defaults by a large financial institution could adversely affect the financial markets generally and us specifically

The commercial soundness of many financial institutions is closely interrelated as a result of credit, trading, clearing or other relationships among the institutions. As a result, concern about the creditworthiness of or a default by, a certain financial institution could lead to significant liquidity problems or losses in, or defaults by, other financial institutions. This may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which we interact on a daily basis. Actual defaults, increases in perceived default risk and other similar events could arise in the future and could have an adverse effect on the financial markets and on us.

(2) There can be no assurance as to the accuracy of the information about our credit risk, or the sufficiency of the collateral we use in managing it

We regularly review our credit exposure to specific clients or counterparties and to specific countries and regions that we believe may present credit concerns. Default risk, however, may arise from events or circumstances that we do not detect, such as account-rigging and fraud. We may also fail to receive full information with respect to the risks of a counterparty, or to accurately manage and assess such information internally. For example, our credit risk assessments with respect to the client whose default led to the U.S. Prime Brokerage Event did not reflect the full extent of the client’s relevant trading activity. In addition, in cases where we have extended credit against collateral, we may fall into a deficiency in value in the collateral if sudden declines in market values reduce the value of our collateral, as was the case with loans extended to the prime brokerage client leading in part to the U.S. Prime Brokerage Event.

(3) Our clients and counterparties may be unable to perform their obligations to us as a result of political or economic conditions

Country, regional and political risks are components of credit risk, as well as market risk. Political or economic pressures in a country or region, including those arising from local market disruptions or currency crises, may adversely affect the ability of clients or counterparties located in that country or region to obtain credit or foreign exchange, and therefore to perform their obligations owed to us.

7. We are exposed to model risk, i.e., risk of financial loss, incorrect decision making, or damage to our credibility arising from model errors or incorrect or inappropriate model application

We widely use models for various purposes including the valuation of illiquid derivative transactions or the estimation of the credit worthiness of certain counterparties. However, models are never perfect, and their use subjects us to model risk. Model errors or incorrect or inappropriate model applications could lead to incorrect decision making, financial losses or damage our credibility. Nomura has a well-established Model Risk Management Framework, including robust model development, implementation, and use, and a sound model validation process and governance. While these initiatives effectively control and limit Model Risk within the firm, it is never perfectly mitigated.

 

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8. NHI is a holding company and depends on payments from its subsidiaries

NHI, the issuer of the common stock underlying the ADSs to which this annual report relates, is a holding company and is heavily dependent on dividends, distributions and other payments from its subsidiaries to be able to settle its financial obligations and liabilities. Regulatory and other legal restrictions, such as those under the Companies Act, may limit NHI’s ability to transfer funds freely, either to or from its subsidiaries. In particular, many of NHI’s subsidiaries, including its broker-dealer subsidiaries, are subject to laws and regulations, including regulatory capital requirements, that authorize regulatory bodies to block or reduce the flow of funds to the parent holding company, or that prohibit such transfers altogether in certain circumstances. For example, Nomura Securities Co., Ltd. (“NSC”), Nomura Securities International, Inc., Nomura International plc and Nomura International (Hong Kong) Limited, NHI’s main broker-dealer subsidiaries, are subject to regulatory capital requirements and changes in such regulatory capital requirements and the required level could limit the transfer of funds to NHI. While NHI monitors and manages the transfer of funds within the Nomura Group on the basis of relevant laws and regulations on a daily basis, these laws and regulations may hinder NHI’s ability to access funds needed to be able to settle its financial obligations and liabilities.

9. We may not be able to realize gains we expect, and may even suffer losses, on our investments in equity securities and non-trading debt securities

We hold substantial investments in equity securities including private equity investments and non-trading debt securities. Under U.S. GAAP, depending on market conditions, we may recognize significant losses in connection with these investments, which could have an adverse impact on our financial condition and results of operations. Moreover, while we may decide to dispose of these equity securities and debt securities, depending on the market conditions, we may not be able to dispose of these equity securities and debt securities when we would like to do so, as quickly as we may wish or at the desired price.

10. We may face an outflow of clients’ assets due to losses incurred within cash reserve funds or debt securities we offer to clients

Cash reserve funds, such as money market funds and money reserve funds are typically categorized as low risk financial products. As a result of a sudden rise in interest rates, such cash reserve funds may fall below their par value due to losses resulting from price decreases, defaults or negative interest charges arising from debt securities held by the fund. If we determine that a stable return cannot be achieved from the investment performance of cash reserve funds, we may accelerate the redemption of, or impose a deposit limit on, such cash reserve funds.

In addition, issuers of debt securities that we sell may default or otherwise delay the payment of interest and/or principal.

Such events may result in the loss of client confidence and lead to an outflow of client assets from our custody or preclude us from increasing such client assets.

● Risks Relating to Our Financial Position

11. We may have to recognize impairment losses with regard to the amount of goodwill, tangible assets and intangible assets recognized on our consolidated balance sheets

We have purchased all or a part of the equity interests in, or operations from, certain other companies in order to pursue our business expansion, and expect to continue to do so when and as we deem beneficial. We account for certain of those and similar purchases and acquisitions as a business combination under U.S. GAAP by allocating our acquisition costs to the assets acquired and liabilities assumed and recognizing the remaining amount as goodwill. On April 1, 2020, Nomura acquired 100% of Greentech and goodwill of ¥12,480 million was reported on our consolidated balance sheet. We also possess tangible and intangible assets other than those stated above.

We may have to recognize impairment losses, as well as other losses associated with subsequent transactions, with regard to the amount of goodwill, tangible assets and intangible assets recognized on our consolidated group balance sheet which may adversely affect our financial condition and results of operations.

 

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12. Liquidity risk could impair our ability to fund operations and jeopardize our financial condition

Liquidity, or having ready access to cash, is essential to our business. We define liquidity risk as the risk of loss arising from difficulty in securing the necessary funding, or from a significantly higher cost of funding than normal levels, due to a deterioration in our creditworthiness or a deterioration in market conditions. In addition to maintaining a readily available cash position, we seek to secure ample liquidity through repurchase agreements and securities lending transactions, long-term borrowings and the issuance of long-term debt securities as well as through diversification of our short-term funding sources such as commercial paper, and by holding a portfolio of highly liquid financial assets. Despite this, there is a risk that we may lose liquidity under certain circumstances, including the following:

(1) We may be unable to access unsecured or secured funding

We continuously access unsecured funding from issuance of securities in the short-term credit markets and debt capital markets as well as bank borrowings to finance our day-to-day operations, including refinancing. We also enter into repurchase agreements and securities lending transactions to raise secured funding for our trading businesses. An inability to access unsecured or secured funding or funding at significantly higher cost than normal levels could have a substantial negative effect on our liquidity. For example, lenders could refuse to extend the credit necessary for us to conduct our business based on their assessment of our long-term or short-term financial prospects if:

 

•

We incur large trading losses,

 

•

The level of our business activity decreases due to a market downturn,

 

•

Regulatory authorities take significant action against us, or

 

•

Our credit rating is downgraded.

In addition to the above, our ability to borrow in the debt capital markets could also be adversely impacted by factors that are not specific to us, such as increases in market interest rates, reductions in banks’ or other financial institutions’ lending ability, a severe disruption of the financial and credit markets, negative views about the general prospects for the investment banking, brokerage or financial services industries, or negative market perceptions of Japan’s financial soundness.

(2) We may be unable to sell assets

If we are unable to raise funds or if our liquidity declines significantly, we will need to liquidate assets or take other actions in order to meet our maturing liabilities. In volatile or uncertain market environments, overall market liquidity may decline. In a time of reduced market liquidity, we may be unable to sell some of our assets, or we may have to sell at depressed prices, which could adversely affect our results of operations and financial condition. Our ability to sell assets may also be adversely impacted by other market participants seeking to sell similar assets into the market at the same time.

(3) Lowering of our credit ratings could impact our funding

Our funding depends significantly on our credit ratings. Rating agencies may downgrade or withdraw their ratings or place us on “credit watch” with negative implications. Downgrades could increase our funding costs and limit our funding. This, in turn, could adversely affect our result of operations and our financial condition. In addition, other factors which are not specific to us may impact our funding, such as negative market perceptions of Japan’s financial soundness.

13. Equity investments in affiliates and other investees accounted for under the equity method in our consolidated financial statements may decline significantly over a period of time and result in us recognizing impairment losses

Under U.S. GAAP, we have affiliates and investees accounted for under the equity method and whose shares are publicly traded. If there is a decline in the market price of the shares, we hold in such affiliates below the carrying amount of our investments over a period of time, and we determine that the decline is other-than-temporary, then we recognize an impairment loss through earnings which may have an adverse effect on our financial condition and results of operations. For example, we recognized an impairment loss of ¥47,661 million against our investment in Nomura Real Estate Holdings, Inc. during the year ended March 31, 2021.

 

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● Risks Relating to Legal, Compliance and Other Operational Issues

14. Operational risk could adversely affect our business

Operational risk is the risk of financial loss or non-financial impact arising from inadequate or failed internal processes and systems, from a lack of appropriate personnel, from human errors, or from external events, and includes fraud, compliance, legal, IT, cyber and information security, third party, and other non-financial risks. We always face the potential of operational risk, and if materializes, it could adversely affect our business. Issues related to operational risk may include the risks listed in items 16 to 22 below.

15. Reputational risk could adversely affect our business

Reputational risk is the risk of possible damage to Nomura’s reputation and associated risk to earnings, capital, or liquidity arising from any association, action, or inaction which could be perceived by stakeholders to be inappropriate, unethical, or inconsistent with Nomura Group’s values and corporate philosophy. We always face the potential of reputational risk, and if any of the events described in this Item 3.D occurs and such risk materializes, it could adversely affect our business outlook, financial condition, or results of operations.

16. We may identify a material weakness in our internal control over financial reporting, indicating that our internal control over financial reporting may not be effective

As a New York Stock Exchange (“NYSE”)-listed company and SEC registrant, we assess the effectiveness of internal controls over financial reporting under the U.S. Sarbanes-Oxley Act of 2002. We also assess the effectiveness of internal controls over financial reporting pursuant to the Financial Instruments and Exchange Act and submit the Management’s Report on Internal Control over Financial Reporting including the results of this evaluation as a part of our Japanese language annual securities report. We have established a framework with the goal of ensuring the effectiveness and appropriateness of these controls. However, we may identify a material weakness in our internal control over financial reporting, indicating that our internal control over financial reporting may not be effective.

For example, we identified a material weakness during the quarter ended March 31, 2024 in relation to certain classification and presentation matters within the consolidated statement of cash flows as included within our consolidated financial statements, which resulted in the need to restate the consolidated statement of cash flows in certain of our annual and interim consolidated financial statements. We identified and implemented a number of remediation actions to address this material weakness and intended to mitigate the risk of similar errors occurring in the future within the consolidated statement of cash flows. Our management concluded that our internal control over financial reporting was effective as of March 31, 2024 and March 31, 2025.

If future material weaknesses are identified, we may be unable to provide financial information in our consolidated financial statements and elsewhere in an accurate, timely and reliable manner or requiring additional restatements of our consolidated financial statements or other aspects of our periodic reporting. Such issues may undermine confidence in our published financial information and other reported information by users of our consolidated financial statements, including the holders of our securities, potentially causing reductions in the price of our common stock and/or ADRs. Additionally, such issues could limit our access to capital markets, affect client’s or counterparties’ appetite to enter into transactions with us and subject us to potential regulatory investigations and sanctions. Each of these factors may materially and adversely affect our business, results of operations and financial condition.

17. Misconduct, fraud or other criminal activity by an employee, director or officer, or any third party, could occur, and our reputation in the market and our relationships with clients could be harmed

We always face the risk that our employees, directors or officers, or any third party, could engage in misconduct that may adversely affect our business. Misconduct by an employee, director or officer includes conduct such as entering into transactions in excess of authorized limits, acceptance of risks that exceed our limits, concealment of unauthorized or unsuccessful activities or criminal or other unlawful actions against customers. The misconduct could also involve the improper use or disclosure of non-public information relating to us or our clients, such as insider trading, improper transmission of such information and the recommendation of trades based on such information, as well as other crimes, which could result in regulatory sanctions, legal liability and serious reputational or financial damage to us.

Third parties may also engage in fraudulent activities, including devising a fraudulent scheme to induce our investment, loans, guarantee or any other form of financial commitment, both direct and indirect. Because of the broad range of businesses that we engage in and the large number of third parties with whom we deal in our day-to-day business operations, such fraud or any other misconduct may be difficult to prevent or detect, and our future reputation and financial condition could be adversely affected, which could result in serious reputational or financial damage to us in the future.

 

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We have taken measures in line with the improvement plan to detect and prevent such fraudulent or misconduct by our employees, directors or officers, or any third party in the future, including the establishment and implementation of the “Nomura Group Code of Conduct” including ensuring its thorough dissemination throughout the group and ensuring thorough compliance with its terms, and through compliance training or any other programs, as well as an enhanced internal reporting system. However, the measures we have implemented or additional measures that may be implemented in the future may not be effective in preventing or managing the risk of misconduct or fraud in all cases, and we may not always be able to detect or deter misconduct or fraud by an employee, director, officers, or third parties. If any administrative or judicial sanction is issued against us as a result of such fraudulent or misconduct, we may lose business opportunities, and our future revenue and results of operations may be materially and adversely affected, even after the sanction is lifted, if and to the extent that our clients, especially public institutions, decide not to engage us for their financial transactions.

In October 2024, a former employee of NSC was arrested by Hiroshima Prefecture police and indicted by the Hiroshima District Public Prosecutors’ Office in November 2024. There is a risk that these developments could adversely affect our reputation, potentially leading to a loss of current and future clients, particularly with respect to clients in the Wealth Management division or other retail businesses, which could adversely affect revenues and overall business performance and could adversely affect our financial condition and results of operations.

Since April 2025, there has been a sharp increase in the number of cases of phishing scams and other cybercrime in which third parties pose as NSC attempting to lead customers to phishing websites using fake emails and to steal customer account numbers and passwords. NSC has decided to thoroughly investigate the damages incurred due to unauthorized access to securities accounts caused by these recent phishing scams, in which third parties utilized customer assets to trade securities, and to provide compensation for damages to a certain extent depending on the individual circumstances. As a result of such phishing scams, as well as any perceived shortcomings in the measures taken to compensate for damages incurred and strengthen security, our future reputation and financial condition could be adversely affected.

18. A failure to identify and appropriately address conflicts of interest could adversely affect our business

We are a global financial institution that provides a wide range of products and services to a diverse group of clients, including individuals, corporations, other financial institutions and governmental institutions. As such, we face potential conflicts of interest in the ordinary course of our business. Conflicts of interests can arise when our services to a particular client conflict or compete, or are perceived to conflict or compete, with our own interests. In addition, where non-public information is not appropriately restricted or shared within Nomura, conflicts of interest can also arise where a transaction within the Nomura Group or a transaction with another client conflict or compete, or is perceived to conflict or compete, with a transaction with a particular client. While we have extensive internal procedures and controls designed to identify and address conflicts of interest on the basis of the “Nomura Group Conflicts of Interest Management Policy”, a failure, or a perceived failure, to identify, disclose and appropriately address such conflicts could adversely affect our reputation, the willingness of current or potential clients to do business with us, and give risk to regulatory actions or litigation against us, which could have a material adverse effect on our financial condition and results of operations.

19. Our business is subject to substantial legal and regulatory risks

Substantial legal liability or a significant regulatory action against us could have a material adverse effect on our business, financial condition or results of operations, or cause reputational harm to us. Also, material changes in regulations applicable to us or to the markets in which we operate could adversely affect our business. See Note 20 “Commitments, contingencies and guarantees” in our consolidated financial statements included in this annual report for further information regarding the significant investigations, lawsuits and other legal proceedings that we are currently facing.

We face significant legal risks in our businesses. These risks include liability under securities or other laws in connection with securities underwriting and offering transactions, liability arising from the purchase or sale of any securities or other financial products, disputes over the terms and conditions of complex trading arrangements or the validity of contracts for our transactions, disputes with our business alliance partners and legal claims concerning our other businesses. When we face the substantial legal liability, we seek advice from experts and third-parties, develop appropriate policies, and address the cases accordingly. However, depending on the disputes, our reputation, financial condition and results of operations could be adversely affected.

(1) Legal liability related to our business may occur and could adversely affect our business, financial condition and results of operations

During a prolonged market downturn or upon the occurrence of an event that adversely affects one of the markets in which we operate, we may be exposed to an increase in claims or significant litigations against us. The cost of defending such claims or litigations may be substantial and our involvement in litigation may damage our reputation. For example, during the year ended March 31, 2022, approximately ¥62.0 billion related to legacy transactions in the U.S. from before the global financial crisis (2007 – 2008) was recognized including legal expenses as well as certain transactions intended to mitigate future losses. In addition, even legal transactions might be subject to adverse public reaction according to the particular details of such transactions.

 

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Furthermore, regulatory and market expectations regarding sustainability, including climate change, in each country continue to evolve rapidly and generate conflicting views and approaches. As a result, our efforts toward sustainability, including participation in voluntary initiatives, may be perceived negatively by some stakeholders, potentially resulting in litigation or administrative penalties.

These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time.

(2) Extensive regulation of our businesses limits our activities and may subject us to significant penalties and losses

The financial services industry is subject to extensive regulation. We are subject to increasing regulation by governmental and self-regulatory organizations in Japan and in virtually all other jurisdictions in which we operate, and such governmental and regulatory scrutiny may increase as our operations expand or as laws change. In addition, while regulatory complexities increase, possibilities of extra-territorial application of a regulation in one jurisdiction to business activities outside of such jurisdiction may also increase. These regulations are broadly designed to ensure the stability of financial systems and the integrity of the financial markets and financial institutions, and to protect clients and other third parties who deal with us, and often limit our activities and/or affect our profitability, through net capital, client protection and market conduct requirements. In addition, on top of traditional finance-related legislation, the scope of laws and regulations applying to, and/or impacting on, our operations may become wider depending on the situation of the wider international political and economic environment or policy approaches taken by governmental authorities in respect of regulatory application or law enforcement. In particular, the number of investigations and proceedings against the financial services industry by governmental and self-regulatory organizations has increased substantially and the consequences of such investigations and proceedings have become more severe in recent years, and we are subject to face the risk of such investigations and proceedings. Although we take measures such as timely monitoring and establishing internal governance procedures in order to comply with law and regulations, we may not always be able to prevent such violations, and we could be fined, prohibited from engaging in some of our business activities, ordered to improve our internal governance procedures or be subject to revocation of our license to conduct business. Our reputation could also suffer from the adverse publicity that any administrative or judicial sanction against us may create, which may negatively affect our business opportunities and ability to secure human resources. As a result of any such sanction, we may lose business opportunities for a period of time, even after the sanction is lifted, if and to the extent that our clients, especially public institutions, decide not to engage us for their financial transactions. In addition, certain market participants may refrain from investing in or entering into transactions with us if we engage in business activities in regions subject to international sanctions, even if our activities do not constitute violations of sanctions laws and regulations.

On September 25, 2024, the Japanese Securities and Exchange Surveillance Commission (the “SESC”) issued a recommendation that an administrative monetary penalty payment order be issued to the Company’s subsidiary, NSC, based on the SESC’s finding that NSC engaged in activities that constituted a violation of laws and regulations as part of certain Japanese government bond (“JGB”) futures transactions conducted in March 2021. As a result, in October 2024, NSC received a suspension of Special Entitlements of JGB Market Special Participants (Primary Dealer) from October 15, 2024 to November 14, 2024 from Japan’s Ministry of Finance and an order for an administrative monetary penalty from the Financial Services Agency (“FSA”). This could impact Nomura’s reputation and financial condition, potentially adversely affecting its business performance.

 

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(3) Tightening of regulations applicable to the financial system and financial industry could adversely affect our business, financial condition and results of operations

If regulations that apply to our businesses are introduced, modified or removed, we could be adversely affected directly or through resulting changes in market conditions. The impact of such developments could make it economically unreasonable for us to continue to conduct all or certain of our businesses, or could cause us to incur significant costs to adjust to such changes.

New regulations or revisions to existing regulations relating to accounting standards, regulatory capital adequacy ratios, liquidity ratios and leverage ratios applicable to us could also have a material adverse effect on our business, financial condition and results of operations. Such new regulations or revisions to existing regulations include the so-called Basel III package formulated by the Basel Committee on Banking Supervision (“Basel Committee”) and the finalized Basel III reforms published in December 2017, and also finalized market risk capital framework published in January 2019. NHI is subject to above revised regulatory capital adequacy ratios, liquidity ratios and leverage ratios since March 2025. Furthermore, in October 2012, the Basel Committee developed and published a set of principles on the assessment methodology and higher loss absorbency requirements for domestic systemically important banks (“D-SIBs”), and, in December 2015, the FSA identified NHI as a D-SIB and imposed a surcharge of 0.5% on our required capital ratio after March 2016 with 3-year transitional arrangement. In addition, FSB published the final standard requiring global systemically important banks (“G-SIBs”) to maintain a certain level of total loss-absorbing capacity (“TLAC”) upon their failure in November 2015. Under the FSA’s policy implementing the TLAC framework in Japan as updated in April 2018, the TLAC requirements in Japan apply not only to Japanese G-SIBs but also to Japanese D-SIBs that are deemed (i) of particular need for a cross-border resolution arrangement and (ii) of particular systemic significance to Japanese financial system if they fail. Based on the revised policy, in March 2019, the FSA published the notices and guidelines of TLAC regulations in Japan. According to these notices and guidelines, NHI is subject to the TLAC requirements in Japan from March 31, 2021 although NHI is not identified as a G-SIB as of the date of this annual report. These changes in regulations may increase our funding costs or require us to liquidate financial instruments and other assets, raise additional capital or otherwise restrict our business activities in a manner that could adversely affect our operating or financing activities or the interests of our shareholders.

(4) Deferred tax assets may be impacted due to a change in business condition or in laws and regulations, resulting in an adverse effect on our operating results and financial condition

Under U.S. GAAP, we recognize deferred tax assets in our consolidated balance sheets as a possible benefit of tax relief in the future if certain criteria are met. If we experience or forecast future operating losses, if tax laws or enacted tax rates in the relevant tax jurisdictions in which we operate change, or if there is a change in U.S. GAAP in the future, we may be required to reduce the deferred tax assets recognized in our consolidated balance sheets which may adversely affect our financial condition and results of operations. See Note 15 “Income taxes” in our consolidated financial statements included in this annual report for further information regarding the deferred tax assets that we currently recognize.

(5) Defects in our anti-money laundering and counter-terrorism financing measures could have serious consequences such as, administrative penalties or punitive fines

In recent years, financial crimes have become more sophisticated, complex, and diverse. As the world faces growing threats of military disputes, terrorism, and cyberattacks, it is highly important to counter the financing of crimes and terrorism. Financial institutions around the world are expected to take strong measures to combat money laundering and terrorist financing. Despite our efforts to improve our anti-money laundering and counter-terrorism financing measures, which we have implemented consistently across the Nomura Group in accordance with the recommendations provided by the Financial Action Task Force (FATF) and the FSA’s “Guidelines on Anti-Money Laundering and Terrorist Financing”, there remains a risk that such measures will not be fully effective in preventing or detecting all violations in a timely manner. As a consequence, we could be subject to administrative penalties or punitive fines, which may adversely affect our financial condition and results of operations. See also “—Risks Relating to Legal, Compliance and Other Operational Issues—19. Our business is subject to substantial legal and regulatory risks—(2) Extensive regulation of our businesses limits our activities and may subject us to significant penalties and losses” for further information regarding regulatory actions and other legal proceedings as well as consequences thereof.

 

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20. Unauthorized disclosure or misuse of personal information held by us may adversely affect our business

We keep and manage personal information obtained from clients in connection with our business. In recent years, there have been many reported cases of personal information and records in the possession of corporations and institutions being improperly accessed, disclosed or misused. There is also a risk of unauthorized acquisition of client information and misuse of customer information by former employees.

Although we exercise care to protect the confidentiality of personal information and have in place policies and procedures designed to safeguard such information and ensure that it is used in compliance with applicable laws, rules and regulations, were any unauthorized disclosure or misuse of personal information to occur, our business could be adversely affected. For example, we could be subject to government actions such as administrative actions or penalties in case there is any violation of applicable personal data protection laws, rules and regulations or be subject to complaints and lawsuits for damages from clients if they are adversely affected due to the unauthorized disclosure or misuse of their personal information (including leakage of such information by an external service provider). In addition, we could incur additional costs associated with changing our security systems, either voluntarily or in response to administrative guidance or other regulatory initiatives. Moreover, restrictions on our ability to use personal information collected from clients may adversely affect our existing businesses or to develop new ones. Furthermore, any damage to our reputation caused by such unauthorized disclosure or misuse could lead to a decline in new clients and/or a loss of existing clients, as well as to increased costs and expenses incurred for public relations campaigns designed to prevent or mitigate damage to our corporate or brand image or reputation.

21. System failure, information leakage and cost of maintaining sufficient cybersecurity could adversely affect our business, financial condition and results of operations

Our businesses rely on secure processing, storage, transmission and reception of personal, confidential and proprietary information on our systems. We have been in the past and may again become the target of attempted unauthorized access, computer viruses or malware, and other cyberattacks designed to access and obtain information on our systems or to disrupt and cause other damage to our services. In recent years, many of our employees increasingly work remotely using networking or other technologies, and these technologies have become even more critical to our business. The implementation of remote work arrangements may also increase the possibility that we will be subject to cyberattacks and other information security breaches. In addition, Nomura is engaged in the cryptocurrency business, and if the cryptocurrency wallets used in that business become targets of cyberattacks or other information security breaches, there is a possibility of unauthorized outflow or loss of cryptocurrencies. Although these threats may originate from human error or technological failure, they may also originate from the malice or fraud of internal parties, such as employees, or third parties, including foreign non-state actors and extremist parties. Additionally, we could also be adversely impacted if any of the third-party vendors, exchanges, clearing houses or other financial institutions to whom we are interconnected are subject to cyberattacks or other informational security breaches. Such events could cause interruptions to our systems, reputational damage, client dissatisfaction, legal liability, enforcement actions or additional costs, any and all of which could adversely affect our financial condition and operations.

While we continue to devote significant resources to monitor and update our systems and implement information security measures to protect our systems, there can be no assurance that any controls and procedures we have in place will be sufficient to protect us from future security breaches. As cyber threats are continually evolving, our controls and procedures may become inadequate and we may be required to devote additional resources to modify or enhance our systems in the future.

22. Our business may be adversely affected if we are unable to hire, retain and develop qualified personnel

Under the philosophy that our people are our greatest assets, we view recruitment, talent development, performance appraisal, and mobility and advancement strategies as one human resources management cycle and work on various talent management initiatives in a comprehensive manner. Any failure to hire, retain, and develop qualified personnel may materially and adversely affect our business, financial condition and results of operations. There is significant competition for such personnel, based on factors such as compensation, the working environment, training and other employee benefits and our reputation as an employer. Spending on our human resource initiatives may harm our profitability. Moreover, developing our human resources and instilling in them a uniform corporate culture is a continuous, intensive process, and it may take more time than initially anticipated.

 

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4. Operating, Financial and Cash Flow Analyses by Management

(1) Operating Results.

Please refer to Item 1 “Information on the Company and Its Subsidiaries and Affiliates—1. Selected Financial Data” and Item 5 “Financial Information—Consolidates Balance Sheets, Consolidated Statements of Income, Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flows” for Operating Results below. The following information also contains certain forward-looking statements that involve risks, uncertainties and assumptions. Nomura’s actual financial results may differ materially from the forward-looking statements contained herein.

Executive Summary

1. Overall results of business

We recognized net revenue of ¥1,892.5 billion during the year ended March 31, 2025, an increase of 21.2% from the previous year. Non-interest expenses increased by 10.3% to ¥1,420.5 billion, income before income taxes was ¥472.0 billion, and net income attributable to the shareholders of NHI was ¥340.7 billion. Return on equity was 10.0%. Earnings per Share* for the year ended March 31, 2025 was ¥111.03, an increase from ¥52.69 for the year ended March 31, 2024. We have decided to pay a dividend of ¥24 per share to shareholders of record as of March 31, 2025. Additionally, in commemoration of our 100th anniversary on December 25, 2025, we have decided to pay a commemorative dividend of ¥10 per share to shareholders of record as of March 31, 2025. As a result, the total annual dividend will be ¥57 per share for the year ended March 31, 2025.

* Diluted net income attributable to NHI shareholders per share.

2. Management’s assessment of key initiatives and achievements during the fiscal year

During the year ended March 31, 2025, our management strategy of “expanding the scope of our business from public into private markets” progressed steadily, reflecting our medium to long-term initiatives to grow stable revenues and diversify our Wholesale revenue streams, while controlling costs.

In the Wealth Management Division, recurring revenue grew due to continued net inflows into recurring revenue assets via the provision of comprehensive asset management services. As a result, income before income taxes reached ¥170.8 billion, the highest level in 11 years.

In the Investment Management Division, the alternative asset under management has reached a record high. Net inflows have helped drive growth in asset under management. Business revenue increased by 19% compared to the previous year. Additionally, investment gains have also increased. As a result, both the division revenue and income before income taxes have reached their highest levels since the division was established in April 2021.

In the Wholesale Division, revenue grew across all business lines and regions. In Global Markets, equity products, execution services, and securitized products performed well, and the revenue of international wealth management business in Asia and the Middle East has also increased significantly. In Investment Banking, the revenue of ECM and M&A in Japan has increased due to a high level of corporate actions. Additionally, M&A in EMEA and solution businesses across all regions grew. As a result, we recorded their highest revenue since the year ended March 31, 2017, both in Japan and internationally.

3. Capital policy and shareholder returns

We plan to maintain appropriate capital ratios and aim for sustainable growth through optimal capital allocation. As preparatory steps to achieve our management vision, while controlling cost levels, we are investing for growth to realize our management strategy of expanding the scope of our business from public into private markets, in order to balance investment and shareholder returns, and maximize shareholder value by improving productivity and expanding revenue sources.

We strive to pay dividends using a consolidated payout ratio of at least 40% of each semi-annual consolidated earnings as a key indicator. Additionally, we aim for a total payout ratio, which includes dividends and share buybacks, of at least 50%. The total amount of shareholder returns for each fiscal year is determined by comprehensively taking into account trends in the regulatory environment in Japan and overseas, including the strengthening of Basel regulations, as well as the consolidated results of our business divisions.

For further details of our dividend policy, refer to Item 4. “Company Information—3.Dividend Policy.”

 

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4. Summary by Segment

In our Wealth Management Division, net revenue for the year ended March 31, 2025 increased by 12.2% from the previous year to ¥451.5 billion. Non-interest expenses increased by 0.4% to ¥280.7 billion. As a result, income before income taxes increased by 39.2% to ¥170.8 billion. In the Wealth Management Division, we have worked to strengthen our wealth management services by enhancing comprehensive wealth management services in line with client needs to help our clients achieve the future they envision. Despite an uncertain market environment, there was an increase in flow revenue, mainly due to an increase in the sales of investment trusts, particularly through face-to-face channels. Additionally, there was also a significant increase in recurring revenue due to the expansion of Wealth Management client assets through our consulting services on the entire asset bases of our clients, which we have been working on continuously.

In addition, we aim to build a sustainable client base and expand our business over the medium to long term by establishing contact points through workplace financial services, and we have been able to successfully increase the number of clients we provide services to, including the working generation. Going forward, we will provide a wide range of wealth management services, including face-to-face consulting, non-face-to-face services using digital tools, and workplace services that address asset building needs.

In our Investment Management Division, net revenue for the year ended March 31, 2025 increased by 24.9% from the previous year to ¥192.5 billion. Non-interest expenses increased by 9.5% to ¥102.9 billion. As a result, income before income taxes increased by 48.8% to ¥89.6 billion. The Investment Management Division recorded the highest business revenue, which is a stable source of revenue, and the highest income before income taxes since the division was established in April 2021. The Investment Management Division has aimed for business revenue growth from increase in assets under management and providing higher value-added asset management. Net inflows for the year ended March 31, 2025 were ¥2.6 trillion, remaining at a high level following the previous year. However, due to market factors, such as the decline in the Japanese stock market, assets under management as of March 31, 2025 only slightly increased to ¥89.3 trillion from March 31, 2024.

On the other hand, the average of assets under management during the year ended March 31, 2025 significantly increased from the previous year, contributing to the expansion of business revenue. Higher value-added services, such as in-house active investments and private asset management business for wealth management, also contributed to the business revenue growth. In particular, alternative assets under management as of March 31, 2025 increased by 40.2% to ¥2,608.2 billion from March 31, 2024. The balance of “Nomu Wrap Fund,” designed to provide investors with a balanced investment approach suitable for various investment styles, reached ¥1.0 trillion.

In our Wholesale Division, net revenue for the year ended March 31, 2025 increased by 22.1% from the previous year to ¥1,057.9 billion. Non-interest expenses increased by 9.8% to ¥891.7 billion. As a result, income before income taxes increased by 208.4% to ¥166.3 billion. In Global Markets, we continued to focus on providing uninterrupted service and liquidity to our clients under tight risk control, as they rebalanced and hedged their portfolio in uncertain markets driven by macro-economic environment, central banks’ policy actions and the U.S. election. We delivered steady performance monetizing client flows and market opportunities led by Securitized Products, Equity Products and International Wealth Management. In Investment Banking, though there were difference among regions, client activity was at a high level and we strived to meet our client’s diversified needs through our services and solutions which led to an increase in the number of deals. Contributions from Advisory, Equity Finance and Equity Solutions in Japan, along with Advisory and Solutions including Private Credit in international regions resulted an increase in revenue.

 

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Progress on Key Performance Indicators (KPIs)

《Management Indicators》

Return on Equity

We have set a quantitative management target for the fiscal year 2030, aiming to achieve an ROE of 8-10%+ and an income before income taxes of over ¥500 billion, as our most important management performance indicators.

After the introduction of the Corporate Governance Code in Japan, the importance of awareness of capital costs has increased among management of Japanese companies. In addition, under the framework of global financial regulations, more effective use of capital is required. As a result, we believe that the optimal allocation of financial resources will become even more important for our Company in the future. Accordingly, beginning in the year ended March 31, 2021, we adopted ROE as a key management indicator, which management uses to track the progress of our sustainable business transformation, along with the revision of “Fundamental Management Policy” based on the approval at the Board of Directors meeting held in May 2020.

ROE is defined and calculated as net income attributable to NHI shareholders divided by average of the total shareholders’ equity at the beginning and end of the period. We believe that disclosure of ROE is useful to investors in that it helps them to assess business conditions and our effective use of capital to enhance corporate value.

We have set ROE target of 8-10%+ for the year ending March 31, 2031, reflecting the cost of capital for our Company. However, ROE may be of limited use in that it does not necessarily reflect financial soundness. In order to avoid the excessive pursuit of capital efficiency with the aim of improving ROE at the expense of financial soundness, we attach importance to the creation of corporate value, giving due consideration to financial soundness, and thereby improving ROE. ROE for the year ended March 31, 2025 increased to 10.0% from 5.1% for the prior fiscal year.

In addition, in order to achieve sustainable growth, we have set a quantitative management target for the year ending March 31, 2031 to achieve an income before income taxes of over ¥500 billion, so that it helps them to assess business conditions more concretely and enhance corporate value. For the year ended March 31, 2025, the income before income taxes was ¥472 billion.

Common equity Tier 1 capital ratio

There are multiple global financial regulations that we must comply with, including capital regulations established by Basel Committee on Banking Supervision as interpreted and implemented by the FSA which have a direct impact on the way we conduct business. For this reason, we have set a target of maintaining a common equity Tier 1 capital ratio of at least 11%, so that we will take into consideration the financial soundness including certain buffer against severe market stress. As announced in May 2025, we have decided to set a new upper limit on our target range of a common equity Tier 1 capital ratio of 11% to 14%.

Our common equity Tier 1 capital ratio decreased to 14.52% as of March 31, 2025 from 16.29% as of March 31, 2024. For further details, on the key capital requirements we must follow, see Item 2 “Operating and Financial Review—4. Operating, Financial and Cash Flow Analyses by Management—(5) Liquidity and Capital Resources—Consolidated Regulatory Capital Requirements”.

 

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《Indicators by Business Segment》

In addition to the Group KPIs, our management also uses certain divisional specific KPIs to monitor and assess performance of the divisions.

Wealth Management Division

We have adopted the following key indicators in the Wealth Management Division to quantify the outcomes of our efforts and monitor our business: Recurring revenue assets; Net inflows of recurring revenue assets; Flow business clients; and Workplace Services; so that our management will be able to monitor the progress of our businesses and target sustainable and further business growth. We believe that disclosure of those indicators is useful to investors in that it helps them to assess the progress of the division’s client-facing activities as well as digest and understand our growth potential.

 

		Year ended March 31 (Trillions of yen)
		2023				2024				% Change from previous year				2025				% Change from previous year
Recurring revenue assets		¥	18.7			¥	23.0				23.0	%		¥	23.5				2.3	%
		Year ended March 31 (Billions of yen)
		2023				2024				% Change from previous year				2025				% Change from previous year
Net inflows of recurring revenue assets		¥	580.5			¥	702.0				20.9	%		¥	1,374.0				95.7	%
*   Revised figures retroactively prior to and including the year ended March 31, 2024 due to a change in definition as mentioned below.
		Year ended March 31 (Thousands)
		2023				2024				% Change from previous year				2025				% Change from previous year
Flow business clients			1,446				1,692				17.0	%			1,644				(2.9	)%
Workplace Services			3,489				3,627				4.0	%			3,883				7.0	%

Recurring revenue assets are defined by adding related loans to the total amount of assets, such as investment trusts, discretionary investments, insurance, and level fee assets, for which management fees and other recurring fees are charged. The amount of related loans totaled approximately ¥992.7 billion as reported within Loans receivable in the consolidated balance sheets as of March 31, 2025. Total recurring revenue assets as of March 31, 2025, were ¥23.5 trillion, an increase of ¥0.5 trillion, or 2.3%, from ¥23.0 trillion as of March 31, 2024, due to initiatives to increase recurring revenue assets and market factors.

Net inflows of recurring revenue assets are defined and calculated by subtracting the amount of sell-offs and outflows from the amount of purchase and inflows of recurring revenue assets, and is an index used to measure the expansion of recurring revenue assets excluding changes in market value. In order to more closely monitor the progress of the stock business, we have retroactively revised the definition for this fiscal year so as not to include the net decrease due to investment trust distributions, which we believe more clearly isolates the level of inflows or outflows of investment trust assets under management (other than distributions). As a result, the net inflows of recurring revenue assets for the year ended March 31, 2023 increased from ¥333.7 billion to ¥580.5 billion. Similarly, the net inflows for the year ended March 31, 2024 increased from ¥317.4 billion to ¥702.0 billion. As a result of our success in establishing market presence in the Wealth Management business, the total net inflows of recurring revenue assets during the year ended March 31, 2025, were ¥1,374.0 billion, exceeding the ¥702.0 billion recorded for the year ended March 31, 2024 by 95.7%.

The number of flow business clients is defined as the total number of clients to whom we provide flow business, businesses that generate flow revenues, within the fiscal year and is a measure of the growth in the client base that is critical to realizing the growth in flow revenue, etc. The number of flow business clients as of March 31, 2025, was approximately 1,644 thousand, which is 2.9% lower than the number as of March 31, 2024, which was 1,692 thousand. This decrease resulted from a slowdown in accumulation toward the end of the fiscal year against the background of heightened uncertainty about the future.

Workplace Services are defined as the sum of the number of workplace financial services provided, such as the number of members of employee stock ownership plans, accounts derived from the employee stock ownership (excluding current members) and corporate defined contribution (DC) pension plan subscribers, and is an index used to measure the expansion of the client base through workplace financial businesses. As of March 31, 2025, the number of workplace services provided stood at 3,883 thousand. We achieved an expansion of 255 thousand, 7.0% increase from that of March 31, 2024, which was 3,627 thousand, mainly in terms of the increase in members of employee stock ownership plans, and have expanded our client base which will lead to sustainable growth.

 

38

Investment Management Division

We have set the balance of assets under management and net inflows as key performance indicators for the Investment Management Division. The businesses in the Investment Management Division generally earn management or similar fees based on the amount of assets under management, meaning that revenue trends for these businesses tend to follow trends in the amount of assets under management, and our management considers this metric to be effective in monitoring the progress of these businesses. We also believe that it is an important indicator of how well investment products are received by investors. We believe that net inflows are an effective metric to monitor the progress of the division’s asset management businesses, excluding market factors from fluctuations in the balance of assets under management. It is an important indicator for ascertaining the effectiveness of the division’s measures to expand assets under management and thereby achieve its profit expansion target.

 

		Year ended March 31 (Billions of yen)
		2023				2024				% Change from previous year				2025				% Change from previous year
Net inflow		¥	(760	)		¥	3,760				—	%		¥	2,648				(29.5	)%
		(Trillions of yen)
		March 31, 2023				March 31, 2024				% Change from previous year				March 31, 2025				% Change from previous year
The balance of assets under management		¥	67.3			¥	89.0				32.2	%		¥	89.3				(0.4	)%

Net inflows are calculated by subtracting cash outflows from cash inflows. For these purposes, cash outflows do not include outflows from distributions. During the year ended March 31, 2025, Net inflows reached ¥2.6 trillion. In the investment trust business, while there were outflows from Money Reserve Funds and other money market funds, there were inflows into ETFs, alternative investments and balanced funds. In the investment advisory and international businesses, there were inflows into global equities and Japanese bonds from domestic institutional investors.

The balance of assets under management includes the net balance (after deducting duplications) of assets under management (gross) of Nomura Asset Management Co., Ltd., Nomura Corporate Research and Asset Management Inc. and Wealth Square., Ltd., as well as third-party investments in assets managed by asset managers under the Investment Management Division. Despite market factors, including the decline in the Japanese stock market, assets under management increased slightly from March 31, 2024, ending at ¥89.3 trillion as of March 31, 2025 due to net inflows.

Wholesale Division

We have adopted a cost-to-income ratio and a revenue to modified RWA ratio as additional key performance indicators in our Wholesale Division. We believe that disclosure of these indicators would be useful for investors to assess progress in terms of cost and resource efficiency. Additionally, we use these indicators to evaluate our business based on progress on cost savings initiatives and return on resources.

 

		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Cost-to-income ratio			96	%			94	%			(2	)%			84	%			(10	)%
Revenue/modified RWA			6.5	%			6.8	%			0.3	%			7.6	%			0.8	%

The cost-to-income ratio for the Wholesale Division is calculated by dividing non-interest expenses for the division for a given reporting period by net revenue generated by the division for the same period, calculated consistently, in each case, with our segment presentation for the division. It is monitored at a divisional level to track operating margins for the business. The ratio improved during the year ended March 31, 2025 compared to the previous year as Wholesale costs increased 10% while revenues grew 22%. Revenues increased on a year-over-year basis across Global Markets and Investment Banking. Global Markets uptick was driven by strong performance across Equity Products, Execution Services, Securitized Products, and International Wealth Management business, whereas Investment Banking witnessed significant growth in ECM, M&A and Solutions businesses. Cost increase was primarily driven by increased revenue-linked trading activity and higher performance related costs. The ratio improved during the year ended March 31, 2024 compared to the previous year as Wholesale revenues rose faster than overall costs. The revenue increase was driven by growth in Investment Banking across major businesses, as well as improved performance in Global Markets particularly in Spread Products and Equity Products. Cost growth was mainly due to higher variable costs in line with performance and higher fixed costs due to inflation.

 

39

The revenue to modified RWA ratio for the Wholesale division is calculated by dividing net revenue generated by our Wholesale Division for a given reporting period (in the case of net revenue for the Wholesale Division for periods shorter than a full fiscal year, on an annualized basis) by the average balance of modified RWA used by the Wholesale Division for the same period. The revenue to modified RWA ratio is monitored to track our revenue earning capacity against risk resources deployed. Modified RWA is the total of (i) average daily risk-weighted assets as calculated and presented under Basel regulations as interpreted and implemented by the FSA and (ii) an adjustment equal to the regulatory adjustment to risk-based capital calculated and presented under Basel regulations as interpreted and implemented by the FSA divided by our internal capital ratio target of 12.5% (daily average for the accounting period), which we use to estimate the amount of deductions to RWA generated by the division. The revenue to modified RWA as we calculate and present it may differ from similarly titled measures presented by our competitors due to the approach and methodologies used for calculation. Our credit risk-weighted assets and operational risk equivalent assets are calculated by using the foundation Internal Ratings-Based Approach and the Standardized Approach, respectively, with the approval of the FSA. Furthermore, Market risk equivalent assets are calculated by using the Internal Models Approach for market risk. The conversion of Wholesale RWA to modified RWA is based on adjustments reflecting our internal minimum capital ratio target. Moreover, the usefulness of this ratio may be limited in that the adjustment applied to RWA, which is intended to capture the appropriate amount of RWA to attribute to our businesses (as opposed to RWA as calculated for regulatory capital purposes), is an estimate incorporating our internal risk tolerance; however, this adjustment may not appropriately reflect the actual regulatory capital impact of the charged assets that are used by our business. Revenue to modified RWA increased for the year ended March 31, 2025 compared to the previous year, as the growth in Wholesale revenue offset the impact of increase in RWA. Revenue increased across both Global Markets and Investment Banking, driven by strong performance in Equity Products, Execution Services, Securitized Products and International Wealth Management, as well as growth in ECM, M&A and Solutions businesses. Revenue to modified RWA increased for the year ended March 31, 2024 compared to the previous year, with the increase in Wholesale revenue more than offsetting the impact of increase in RWA. The revenue increased mainly from Global Markets due to improved performance in spread products and equity products and in Investment Banking across major businesses.

Banking Division

On April 1, 2025, Nomura Group established a new Banking Division. Key indicator(s) decided for Banking Division, as a new business segment, will be disclosed from the year ending March 31, 2026.

 

40

Results of Operations

Overview

The following table provides selected consolidated statements of income information for the years ended March 31, 2023, 2024 and 2025.

 

		Millions of yen, except percentages
		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Non-interest revenues:
Commissions		¥	279,857			¥	364,095				30.1	%		¥	407,011				11.8	%
Fees from investment banking			113,208				173,265				53.1				212,234				22.5
Asset management and portfolio service fees			271,684				310,154				14.2				378,196				21.9
Net gain on trading			563,269				491,611				(12.7	)			580,099				18.0
Gain on private equity and debt investments			14,504				11,877				(18.1	)			7,634				(35.7	)
Gain (loss) on investments in equity securities			(1,426	)			9,612				—				444				(95.4	)
Other			130,940				175,824				34.3				223,264				27.0
Total Non-interest revenues			1,372,036				1,536,438				12.0				1,808,882				17.7
Net interest revenue			(36,459	)			25,562				—				83,603				227.1
Net revenue			1,335,577				1,562,000				17.0				1,892,485				21.2
Non-interest expenses			1,186,103				1,288,150				8.6				1,420,521				10.3
Income before income taxes			149,474				273,850				83.2				471,964				72.3
Income tax expense			57,798				96,630				67.2				124,709				29.1
Net income		¥	91,676			¥	177,220				93.3	%		¥	347,255				95.9	%
Less: Net income (loss) attributable to noncontrolling interests			(1,110	)			11,357				—				6,519				(42.6	)
Net income attributable to NHI shareholders		¥	92,786			¥	165,863				78.8	%		¥	340,736				105.4	%
Return on equity			3.1	%			5.1	%							10.0	%

Net revenue increased from the year ended March 31, 2024 to the year ended March 31, 2025. This increase was primarily driven by Asset management and portfolio service fees from our Wealth Management Division and Investment Management Division and Net gain on trading from our Wholesale Division. The increase in Commissions was primarily due to an increase in commissions received from distribution of investment trusts. Fees from investment banking increased during the year ended March 31, 2025 primarily due to an increase in revenue from underwriting and sales commission and M&A advisory fee. Asset management and portfolio service fees increased as the average of asset under management increased during the year ended March 31, 2025. Net gain on trading increased during the year ended March 31, 2025, primarily due to an increase in revenue from the Fixed Income and Equities businesses. Net gain on trading also included total gains of ¥2.3 billion attributable to changes in Nomura’s own creditworthiness with respect to derivative liabilities primarily due to a widening of Nomura’s credit spread. Gain (loss) on investments in equity securities decreased during the year ended March 31, 2025, primarily due to a result of market correction of the underlying investment during the year ended March 31, 2025. Gain (loss) on investments in equity securities includes both realized and unrealized gains and losses on investments in equity securities held for operating purposes which are our investments in unaffiliated companies, which we hold on a long-term basis in order to promote existing and potential business relationships. Other increased during the year ended March 31, 2025, primarily due to foreign exchange gains.

Net revenue increased from the year ended March 31, 2023 to the year ended March 31, 2024. This increase was primarily driven by Commissions from our Wealth Management Division. The increase in Commissions was primarily due to an increase in commissions received from brokerage for equity and equity-related products and distribution of investment trusts. Fees from investment banking increased during the year ended March 31, 2024 primarily due to an increase in revenue from underwriting and sales commission. Asset management and portfolio service fees increased as asset under management increased during the year ended March 31, 2024. Net gain on trading decreased during the year ended March 31, 2024, primarily due to recovery of losses related to the U.S. Prime Brokerage Event disappeared. Net gain on trading also included total losses of ¥13.8 billion attributable to changes in Nomura’s own creditworthiness with respect to derivative liabilities primarily due to a tightening of Nomura’s credit spread. Gain (loss) on investments in equity securities increased during the year ended March 31, 2024, primarily due to a result of market appreciation of the underlying investment during the year ended March 31, 2024. Gain (loss) on investments in equity securities includes both realized and unrealized gains and losses on investments in equity securities held for operating purposes which are our investments in unaffiliated companies, which we hold on a long-term basis in order to promote existing and potential business relationships. Other increased during the year ended March 31, 2024, primarily due to foreign exchange gains.

 

41

Net interest revenue fluctuates by the balance and structure of total assets and liabilities, which includes trading assets and financing and lending transactions, and term structure and volatility of interest rates. Net interest revenue is an integral component of trading activity. In assessing the profitability of our overall business and of our Global Markets business in particular, we view Net interest revenue and Non-interest revenues in aggregate. For the year ended March 31, 2025, interest and dividend revenue, including a dividend from our investment in American Century Investments increased by 12%, and interest expense increased by 10% from the year ended March 31, 2024. As a result, Net interest revenue for the year ended March 31, 2025 increased from the year ended March 31, 2024. For the year ended March 31, 2024, interest and dividend revenue, including a dividend from our investment in American Century Investments increased by 135%, and interest expense increased by 126% from the year ended March 31, 2023. As a result, Net interest revenue for the year ended March 31, 2024 increased from the year ended March 31, 2023.

Non-interest expenses for the year ended March 31, 2025 increased from the year ended March 31, 2024, primarily due to increase in Compensation and benefits.

Non-interest expenses for the year ended March 31, 2024 increased from the year ended March 31, 2023, primarily due to increase in Compensation and benefits.

We are subject to various taxes in Japan and we have applied the Group Tax Sharing system. The Group Tax Sharing system is only available for a national tax. Our domestic effective statutory tax rate was approximately 31% for the year ended March 31, 2023, 2024 and 2025, respectively. Furthermore, as a result of revision to Japanese domestic tax laws on March 31, 2025, Nomura’s effective statutory tax rate will increase from 31% to 31.5% for fiscal years beginning on or after April 1, 2026. Our foreign subsidiaries are subject to the income taxes of the jurisdictions in which they operate, which are generally lower than those in Japan. The Company’s effective statutory tax rate in any one year is therefore dependent on our geographic mix of profits and losses and also on the specific tax treatment applicable in each jurisdiction.

Income tax expense for the year ended March 31, 2025, represented an effective tax rate of 26.4%. The significant factors causing the difference between the effective tax rate of 26.4% and the effective statutory tax rate of 31% were the changes in deferred tax valuation allowances which decreased the effective tax rate by 5.3%.

Income tax expense for the year ended March 31, 2024, represented an effective tax rate of 35.3%. The significant factors causing the difference between the effective tax rate of 35.3% and the effective statutory tax rate of 31% were the increment of non deductible expenses which increased the effective tax rate by 6.0%, partially offset by the non-taxable income which decreased the effective tax rate by 2.5%.

Income tax expense for the year ended March 31, 2023, represented an effective tax rate of 38.7%. The significant factors causing the difference between the effective tax rate of 38.7% and the effective statutory tax rate of 31% were the changes in deferred tax valuation allowances which increased the effective tax rate by 11.3%, partially offset by the non-taxable income which decreased the effective tax rate by 4.7%.

 

42

Results by Business Segment

Nomura’s operating management and management reporting are prepared based on the Wealth Management, the Investment Management, and the Wholesale segments. We renamed the Retail Division as the “Wealth Management Division” , effective April 1, 2024 to reflect the transformation of business model.

Net gain (loss) related to economic hedging transactions, a part of realized gain (loss) on investments in equity securities held for operating purposes, our share of equity in the earnings of affiliates, corporate items and other financial adjustments are included as “Other” operating results outside of business segments in our segment information. We established a new Banking Division, effective April 1, 2025. Historical financial information as of and for three years ended March 31, 2025 and the discussion thereof included in this annual report is presented on the basis of our historical structure consisting of three divisions (Wealth Management, Investment Management and Wholesale). Discussions of our business on and after April 1, 2025, including discussions of our strategy and goals, are on the basis of the new four division structure.

A part of unrealized gain (loss) on certain investments in equity securities held for operating purposes is classified as a reconciling item outside of our segment information. The following segment information should be read in conjunction with Note 21 “Segment and geographic information” in our consolidated financial statements included in this annual report. The reconciliation of our segment results of operations and consolidated financial statements is provided in Note 21 “Segment and geographic information” in our consolidated financial statements included in this annual report.

Wealth Management

Operating Results of Wealth Management

 

		Millions of yen
		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Non-interest revenue		¥	297,496			¥	395,900				33.1	%		¥	440,553				11.3	%
Net interest revenue			2,695				6,461				139.7				10,934				69.2
Net revenue			300,191				402,361				34.0				451,487				12.2
Non-interest expenses			266,695				279,682				4.9				280,736				0.4
Income before income taxes		¥	33,496			¥	122,679				266.2	%		¥	170,751				39.2	%

Net revenue increased from the year ended March 31, 2024 to the year ended March 31, 2025 primarily due to an increase in asset management fees.

Net revenue increased from the year ended March 31, 2023 to the year ended March 31, 2024 primarily due to an increase in commissions earned from brokerage commissions and the distribution of investment trusts.

Non-interest expenses was largely unchanged from the year ended March 31, 2024 to the year ended March 31, 2025.

Non-interest expenses increased from the year ended March 31, 2023 to the year ended March 31, 2024 primarily due to an increase in bonus expense driven by an increase in revenue.

 

43

The following table shows the breakdown of Wealth Management non-interest revenues for the year ended March 31, 2024 and 2025.

 

										Millions of yen
										Year ended March 31
										2024				2025				% Change from previous year
Commissions										¥	173,461			¥	183,598				5.8	%
Brokerage commissions											80,239				72,249				(10.0	)
Commissions for distribution of investment trusts											54,857				65,852				20.0
Other commissions											38,365				45,497				18.6
Net gain on trading											55,919				52,483				(6.1	)
Fees from investment banking											23,066				27,323				18.5
Asset management fees											124,446				156,732				25.9
Others											19,008				20,417				7.4
Non-interest revenues										¥	395,900			¥	440,553				11.3	%
Commissions increased from the year ended March 31, 2024 to the year ended March 31, 2025, primarily due to an increase in commissions for distribution of investment trusts. Asset management fees increased from the year ended March 31, 2024 to the year ended March 31, 2025, due to an increase in recurring revenue.   Wealth Management Client Assets   The following table presents amounts and details regarding the composition of Wealth Management client assets as of March 31, 2024 and 2025. Wealth Management client assets consist of clients’ assets under management and assets relating to variable annuity insurance products.
		Trillions of yen
		Year ended March 31, 2024
		Balance at beginning of year				Gross inflows				Gross outflows				Market appreciation / (depreciation)				Balance at end of year
Equities		¥	78.0			¥	31.1			¥	(27.0	)		¥	20.4			¥	102.5
Debt securities			18.5				13.6				(18.4	)			6.4				20.1
Equity investment trusts			10.2				3.8				(3.6	)			2.9				13.3
Debt investment trusts			6.8				0.8				(0.3	)			0.0				7.3
Overseas mutual funds			1.2				0.5				(0.1	)			0.2				1.8
Others			7.5				1.8				(0.8	)			0.1				8.6
Total		¥	122.2			¥	51.6			¥	(50.2	)		¥	30.0			¥	153.6
		Trillions of yen
		Year ended March 31, 2025
		Balance at beginning of year				Gross inflows				Gross outflows				Market appreciation / (depreciation)				Balance at end of year
Equities		¥	102.5			¥	41.1			¥	(38.4	)		¥	(13.0	)		¥	92.2
Debt securities			20.1				20.5				(23.7	)			3.8				20.7
Equity investment trusts			13.3				5.4				(5.0	)			(0.4	)			13.3
Debt investment trusts			7.3				0.7				(0.5	)			(0.8	)			6.7
Overseas mutual funds			1.8				0.7				(0.2	)			(0.3	)			2.0
Others			8.6				2.5				(1.1	)			(1.1	)			8.9
Total		¥	153.6			¥	70.9			¥	(68.9	)		¥	(11.8	)		¥	143.8

Wealth Management client assets decreased from March 31, 2024 to March 31, 2025. The balances of our clients’ equity and equity-related products decreased from March 31, 2024 to ¥92.2 trillion as of March 31, 2025, mainly due to market depreciation during the year. The balances of our clients’ investment trusts decreased by ¥0.4 trillion from ¥22.4 trillion as of March 31, 2024 to ¥22.0 trillion as of March 31, 2025.

Wealth Management client assets increased from March 31, 2023 to March 31, 2024. The balances of our clients’ equity and equity-related products increased ¥24.5 trillion from March 31, 2023 to ¥102.5 trillion as of March 31, 2024, mainly due to increase of inflows during the year. The balances of our clients’ investment trusts increased by ¥4.2 trillion from ¥18.2 trillion as of March 31, 2023 to ¥22.4 trillion as of March 31, 2024.

 

44

Investment Management

Operating Results of Investment Management

 

		Millions of yen
		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Non-interest revenue		¥	120,096			¥	149,575				24.5	%		¥	181,010				21.0	%
Net interest revenue			8,463				4,568				(46.0	)			11,463				150.9
Net revenue			128,559				154,143				19.9				192,473				24.9
Non-interest expenses			85,064				93,945				10.4				102,882				9.5
Income before income taxes		¥	43,495			¥	60,198				38.4	%		¥	89,591				48.8	%
Net revenue increased from the year ended March 31, 2024 to the year ended March 31, 2025, primarily due to an increase in gains recognized in respect of our investment in American Century Investments and an increase in management fee revenue in the asset management businesses.   Net revenue increased from the year ended March 31, 2023 to the year ended March 31, 2024, primarily due to an increase in gains recognized in respect of our investment in American Century Investments and an increase in management fee revenue in the asset management businesses.   Non-interest expenses increased from the year ended March 31, 2024 to the year ended March 31, 2025, primarily due to an increase in personnel expenses driven by increases in bonuses.   Non-interest expenses increased from the year ended March 31, 2023 to the year ended March 31, 2024, primarily due to an increase in personnel expenses driven by increases in bonuses.   The breakdown of net revenue for Investment Management is as follows.
		Millions of yen
		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Business revenue(1)		¥	120,664			¥	137,249				13.7	%		¥	163,688				19.3	%
Investment gain/ loss(2)			7,895				16,894				114.0				28,785				70.4
Net revenue		¥	128,559			¥	154,143				19.9	%		¥	192,473				24.9	%

(1)

Consists of divisional revenue, other than investment gain/loss, including revenue generated by our asset management business (excluding gains and losses related to our investment in American Century Investments), revenues generated by Nomura Babcock & Brown Co., Ltd.’s aircraft leasing-related businesses and management fee revenues generated from our private equity and other investment businesses

 

(2)	Consists of divisional revenue attributable to investments (including fair value fluctuations, funding cost and dividends), including gains and losses related to our investment in American Century Investments, our investments held in our private equity and other investment businesses.

 

45

The following table presents assets under management of each principal Nomura entity within our Investment Management Division as of March 31, 2024 and 2025.

 

						Billions of yen
						Year ended March 31, 2024
						Balance at beginning of year				Gross inflows				Gross outflows				Market appreciation / (depreciation)				Balance at end of year
Nomura Asset Management Co., Ltd.						¥	69,092			¥	31,019			¥	(28,614	)		¥	19,514			¥	91,011
Nomura Corporate Research and Asset Management Inc. etc.							3,868				1,799				(1,098	)			1,019				5,588
Combined total							72,960				32,818				(29,712	)			20,533				96,599
Shared across group companies							(5,688	)			(2,061	)			1,680				(1,529	)			(7,598	)
Total						¥	67,272			¥	30,757			¥	(28,032	)		¥	19,004			¥	89,001
		Billions of yen
		Year ended March 31, 2025
		Balance at beginning of year				Adjustment in beginning balance				Gross inflows				Gross outflows				Market appreciation / (depreciation)				Balance at end of year
Nomura Asset Management Co., Ltd.		¥	91,011			¥	(2,837	)		¥	34,509			¥	(33,369	)		¥	(1,264	)		¥	88,050
Nomura Corporate Research and Asset Management Inc. etc.			5,588				0				1,091				(1,382	)			249				5,546
Combined total			96,599				(2,837	)			35,600				(34,751	)			(1,015	)			93,596
Shared across group companies			(7,598	)			2,837				(952	)			1,552				(97	)			(4,258	)
Total		¥	89,001			¥	0			¥	34,648			¥	(33,199	)		¥	(1,112	)		¥	89,338

Notes: Combined total of Nomura Asset Management Co., Ltd. and Shared across group companies assets decreased similarly due to the reorganization in the Americas made on April 1, 2024.

Assets under management was largely unchanged the year ended March 31, 2024 to the year ended March 31, 2025.

Assets under management increased primary due to market factors and net inflows into a wide range of products during the year ended March 31, 2024.

The following table presents Nomura Asset Management Co., Ltd.’s market share, in terms of net asset value, of the Japanese publicly offered investment trusts market as of March 31, 2023, 2024 and 2025.

 

		March 31
		2023				2024				2025
Total of publicly offered investment trusts			27	%			26	%			25	%
Equity investment trusts			25	%			25	%			24	%
Debt investment trusts			44	%			44	%			44	%

(Source) Nomura’s own calculation based on data published by the Investment Trusts Association, Japan.

Investment trust assets included in assets under management by Nomura Asset Management Co., Ltd. were ¥62.1 trillion as of March 31, 2025, a ¥0.8 trillion, 1% decreased from March 31, 2024. This decrease was due to net inflows of ¥1.6 trillion and market depreciation of ¥2.4 trillion. Despite the market depreciation, the balances of certain investment trusts, including TOPIX Banks Exchange Traded Fund and Nomu Wrap Fund increased.

Investment trust assets included in assets under management by Nomura Asset Management Co., Ltd. were ¥62.9 trillion as of March 31, 2024, a ¥15.0 trillion, 31% increased from March 31, 2023. This increase was due to net inflows of ¥1.5 trillion and market appreciation of ¥13.4 trillion. The balances of certain investment trusts, including TOPIX Exchange Traded Fund and NIKKEI 225 Exchange Traded Fund increased.

 

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Wholesale

Operating Results of Wholesale

The operating results of our Wholesale Division comprise the combined results of our Global Markets and Investment Banking businesses. Our Global Markets business comprises our Fixed Income and Equities businesses.

 

		Millions of yen
		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Non-interest revenue		¥	809,681			¥	875,664				8.1	%		¥	1,015,803				16.0	%
Net interest revenue			(37,301	)			(9,517	)			—				42,135				—
Net revenue			772,380				866,147				12.1				1,057,938				22.1
Non-interest expenses			743,011				812,236				9.3				891,656				9.8
Income before income taxes		¥	29,369			¥	53,911				83.6	%		¥	166,282				208.4	%

Net revenue increased from the year ended March 31, 2024 to the year ended March 31, 2025. Fixed Income revenues in Global Markets increased due to a strong performance in spread products. Equities revenues in Global Markets increased primarily due to increase in equity products and execution service. Investment Banking revenues increased primarily due to strong performance in Japan and overseas during the year ended March 31, 2025.

Net revenue increased from the year ended March 31, 2023 to the year ended March 31, 2024. Fixed Income revenues in Global Markets increased due to a strong performance in spread products. Equities revenues in Global Markets increased primarily due to increase in equity products in all regions and strong performance in execution service in Japan due to appreciation of market. Investment Banking revenues increased primarily due to strong performance in Japan during the year ended March 31, 2024.

Non-interest expenses increased from the year ended March 31, 2024 to the year ended March 31, 2025, primarily due to the impact of a weaker yen on the translation of non-yen denominated overseas expenses, and increase in compensation expenses compared to previous year.

Non-interest expenses increased from the year ended March 31, 2023 to the year ended March 31, 2024, primarily due to the impact of a weaker yen on the translation of non-yen denominated overseas expenses, and increase in compensation expenses due to increase in stock compensation from appreciation of stock price compared to previous year.

The following table presents a breakdown of net revenue for Wholesale for the year ended March 31, 2023, 2024 and 2025.

 

		Millions of yen
		Year ended March 31
		2023				2024				% Change from previous year				2025				% Change from previous year
Wholesale net revenue:
Global Markets net revenue		¥	656,298			¥	707,113				7.7	%		¥	874,622				23.7	%
Investment Banking net revenue			116,082				159,034				37.0				183,316				15.3
Net revenue		¥	772,380			¥	866,147				12.1	%		¥	1,057,938				22.1	%

Global Markets

We have a proven track record in sales and trading of debt securities, equity securities, and foreign exchange, as well as derivative products referencing these financial instruments to domestic and overseas institutional investors. In response to the increasingly diverse and complex needs of our clients, we continue to enhance our trading and product origination capabilities to offer superior products not only to domestic and overseas institutional investors, but also to our Wealth Management and Investment Management Divisions. This cross-divisional approach also extends to Investment Banking, where close collaboration leads to high value-adding solutions for our clients. These ties enable us to identify the types of products of interest for investors and develop and deliver products that meet their needs. We continue to develop extensive ties with institutional investors in Japan and international markets, as well as wealthy investors, public-sector agencies, and regional financial institutions in Japan, and government agencies, financial institutions, and corporations around the world.

 

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