Nomura Securities Co. on Friday reported strong earnings for fiscal 2000, while Nikko Securities Co. and Daiwa Securities Group Inc. suffered setbacks.
Nomura, the nation’s leading brokerage house, said its consolidated net profit soared 24.2 percent to 181.67 billion yen in fiscal 2000 as fees from its asset management unit more than offset a decline in commission revenues emanating from the weak stock market.
Operating revenues for the year, which ended March 31, came to 1.299 trillion yen, up 19.3 percent, though its pretax profit sagged 5 percent to 302.08 billion yen.
Commissions on asset management, portfolio services and consulting related to mergers and acquisitions more than doubled — to 183.5 billion yen, up 111 percent.
Nomura noted that the balance of investment trusts under its custody skyrocketed by 2.4 trillion yen during the 12-month period to 15.5 trillion yen.
It also said a 32.6 percent increase in net gains on securities trading to 345.1 billion yen was behind the improved profitability.
These developments more than offset a range of negative factors, including a 44.7 percent drop in brokerage commissions to 133.5 billion yen and a 52.4 percent fall to 37.8 billion yen in commissions from investment trust sales.
On a parent-only basis, it reported a 19.5 percent pretax profit drop to 244.11 billion yen on operating revenues of 575.84 billion yen, down 7.8 percent.
Net profit also fell 8.8 percent to 131.56 billion yen, with per-share net profit coming to 67.01 yen, a fall from the previous period’s 73.44 yen.
Meanwhile, Nikko posted 44.28 billion yen in consolidated net profit in fiscal 2000, down 50.9 percent from the previous year, reflecting sluggish stock trading and poor sales of investment trusts.
Profit per share came to 23.98 yen, down from 55.50 yen, Nikko said in its earnings report for the year.
Consolidated pretax profit contracted 48.1 percent to 96.03 billion yen on a 16.8 percent fall in operating revenues to 442.55 billion yen.
Although Nikko scored a 9.2 percent gain in underwriting and sales commissions to 46.78 billion yen — due to the contribution of Nikko Salomon Smith Barney Ltd., Nikko’s joint venture with Citigroup Inc. of the United States — overall commission revenues dropped 25.3 percent to 284.53 billion yen, led by a 43.3 percent fall in brokerage commissions to 99.94 billion yen.
On a parent-only basis, Nikko reported a pretax profit of 36.13 billion yen, down 73.8 percent, and a net profit of 27.32 billion yen, down 71.6 percent, on a 36.6 percent fall in operating revenues to 196.72 billion yen.
Daiwa likewise suffered shrinking profitability in fiscal 2000. Its consolidated net profit plunged 38.7 percent to 64.55 billion yen in the year, and pretax profit dropped 20.7 percent to 177.80 billion yen. Operating revenues came to 718.11 billion yen, up 9.7 percent.
The brokerage blamed the dwindling profitability on a range of factors, including a 43.8 percent commission revenue plunge to 82.88 billion yen, and a 55.1 percent dive in commissions springing from sales of investment trusts and other financial instruments to investors.
A surge in pretax financial expenditures to 195.97 billion yen from the preceding fiscal year’s 90.52 billion yen was also a major negative factor.
The company’s net balance took an additional beating from the payment of 32.22 billion yen in minority interest — the aggregate interest of shareholders who collectively own less than half the shares in a company.
On a parent-only basis, the brokerage reported a 47.6 percent pretax profit rise to 12.42 billion yen on operating revenues of 29.91 billion yen, down 27.6 percent.
Net profit plummeted 92.9 percent to 8.86 billion yen, with per-share net profit coming to 6.65 yen, a sharp fall from the previous period’s 93.91 yen.
Jiji PressThe Securities and Exchange Surveillance Commission on Friday advised the Financial Services Agency to punish Nikko Securities Co. for an illegal practice that benefited certain customers.
The brokerage has also allegedly written false statements on documents to be used for marketing.
The FSA was advised to punish both the company and employees involved in such practices.
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