Three top Japanese brokerages swing to black after cost cuts

JIJI

Three of Japan’s five major brokerages returned to the black on their group bottom line in the April-September first half of fiscal 2012, thanks chiefly to cost cuts.

The three are industry leader Nomura Holdings Inc., Daiwa Securities Group Inc. and Mizuho Securities Co., a unit of Mizuho Financial Group Inc. .

Mitsubishi UFJ Securities Holdings Co., a unit of Mitsubishi UFJ Financial Group Inc., secured a profit increase, but SMBC Nikko Securities Inc., under the wing of Sumitomo Mitsui Financial Group Inc., suffered a profit fall due to sluggish sales of investment trust funds.

Net operating revenue at Daiwa remained almost unchanged from a year earlier, but the company secured a net profit as it slashed sales and general administrative expenses by ¥23 billion. Nomura also cut costs.

All five firms promoted bond sales while enjoying sharp growth in commission revenues related to corporate fund procurements.

In particular, Daiwa, which lead-managed Japan Airlines’ relisting on the Tokyo Stock Exchange, generated some ¥5.5 billion in commission income from the job.

Meanwhile, Japan’s five major online brokerages suffered drops of more than 10 percent in April-September net profits. They are SBI Securities Co., a unit of SBI Holdings Inc.; Monex Group Inc.; Rakuten Securities Inc., a unit of Rakuten Inc.; Matsui Securities Co.; and Kabu.com Securities Co.

The dismal results were laid to a slumping investment appetite among individuals due to stock price falls, and poor foreign exchange margin trading services.