HONG KONG â€"Nomura is riding high on Abenomics.
Japan’s biggest brokerage firm on Friday said net income for the April-to- June quarter soared to 65.9 billion yen ($667 million). That was nearly 35 times greater than the 1.9 billion yen it earned in the same quarter last year, a dramatic increase driven by a renewed surge in trading of Japanese stocks.
Trading volumes in Japanese stocks have had a huge increase since late 2012, when Prime Minister Shinzo Abe took office and set to work introducing forceful monetary, fiscal and economic overhauls. The Nikkei 225-share index rallied about 80 percent in the six months ended in May before it retreated on concerns the U.S. Federal Reserve may begin to wind down its bond purchases. Despite whipsaw trading in the past two months, the Nikkei is still up 36 percent so far this year and 67 percent from 12 months ago.
That has translated into blockbuster business for Nomura. Net revenue from its retail business more than doubled in the quarter ended in June, rising 101 percent to 166.3 billion yen a year earlier. Net pretax income from retail was 81.1 billion yen, nearly seven times higher than a year ago. The revenue and profit figures both marked the best quarterly performance for Nomura’s retail brokerage in a decade.
Nomura also had a brisk underwriting business in the quarter. That included acting as one of the lead underwriters on Suntory Beverage and Food’s 388 billion yen ($3.9 billion) initial public offering in June â€" the biggest new listing in Asia this year.
The results, while in line with analysts’ expectations, highlighted just how far Nomura has come since last summer, when its chief executive and chief operating officer quit following an insider trading scandal. Also, in September of last year, the bank began a $1 billion cost cutting program, following $1.2 billion in cost cuts announced in 2011.
‘‘We continue to lower our cost base and build up a stable earnings platform to contribute to economic growth,’’ Nomura’s chief executive, Koji Nagai, said in a statement accompanying the earnings release.
