Daiwa Securities Co. and Nikko Securities Co., two of the nation’s Big Four brokerage firms, on April 25 both reported net losses for the business year that ended March 31 due to the cost of bailing out their troubled affiliates.
Daiwa said it posted declines in unconsolidated revenue and pretax profit for the year, owing mainly to a plunge in income from trading on its own account. Operating revenue dropped 3.3 percent to 291.78 billion yen, while pretax profit dropped 29.2 percent to 44.26 billion yen. A net loss of 84.02 billion yen was posted after appropriating 120 billion yen to aid its troubled affiliate, Daiwa Finance Co.
But Daiwa Securities intends to keep its annual dividend payment unchanged at 8 yen per share by drawing down on its reserves, company officials said. Daiwa Securities has not supplied earnings projections for the following financial year since last year, when it started reporting quarterly results instead.
Commissions brought in 230.83 billion yen in revenue. Underwriting commissions, particularly those for debt issues, expanded 50.4 percent to 40.4 billion yen, but brokerage commissions declined 7.3 percent to 97.99 billion yen. Bond brokerage commissions dropped sharply by 31.5 percent, while stock brokerage commissions stayed flat.
Meanwhile, Nikko Securities announced that it posted an unconsolidated net loss of 113.58 billion yen, or 77.31 yen per share, for fiscal 1996, in contrast to a profit of 33.76 billion yen the previous year. Nikko provided a total of 147.5 billion yen for three ailing affiliates — Kyodo Mortgage Acceptance Co., Nikko Credit Service Co. and Nikko Real Estate Co., according to the firm.
Nikko plans to pay a dividend of 8 yen per share for fiscal 1996, unchanged from the previous year. On a consolidated basis, the company incurred a net loss of 116.69 billion yen, or 79.43 yen per share, on operating revenues of 461.09 billion yen, up 16.9 percent.