Nomura back in the black

Increase in commissions earns brokerage 144 billion yen

Nomura Securities Co. announced Friday that it returned to the black on an unconsolidated net basis in fiscal 1999 due largely to a surge in stock brokering commissions in the wake of the market’s recovery.

On a parent-only basis, Nomura’s pretax profit for the business year jumped nearly sevenfold from the previous year to 303.3 billion yen, the highest level since the bursting of the asset-inflated “bubble” economy in the early 1990s. Operating revenues shot up 73.9 percent to 624.69 billion yen.

The pretax profit for the 12-month period through March 31 was the highest since that of fiscal 1991, officials said.

In the 12-month period through March 31, the brokerage’s net profit came to 144.18 billion yen, a sharp turnaround from the previous fiscal year’s net loss of 241.84 billion yen.

Per-share net profit came to 73.44 yen, compared with the per-share net loss of 123.20 yen in the preceding fiscal year.

Nomura will pay a per-share dividend of 15 yen for fiscal 1999, up 5 yen from fiscal 1998.

Nomura attributed the sharp upsurge in its profitability to stock brokering commissions, which nearly tripled to 215.3 billion yen.

The entry of various Internet brokerages into the commission business was expected to serve as a setback for Nomura following last year’s liberalization of commission rates. Nomura’s market share, however, grew to 11.1 percent from the previous fiscal year’s 9.5 percent.

Underwriting commissions for new share and bond issues also tripled to 64.2 billion yen, while commissions from sales of investment trusts rocketed 230 percent to 78.2 billion yen.

Gains from proprietary trading in securities also surged 49 percent to 145.6 billion yen.

Meanwhile, Nomura had to set aside a total of 85.9 billion yen to make up for a shortfall in its retirement allowance reserves during fiscal 1999.

Still, the sharp growth in its profitability has more than offset the increased cost of that item, it added.