Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Net operating revenues increased by 8% to JPY161 billion, indicating strong financial performance.
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Ordinary income saw a significant rise of 93.1%, reaching JPY72.8 billion.
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The wealth management segment showed steady progress with asset-based revenues growing.
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Record high ordinary income in the asset management segment, driven by growth in active funds and real estate AUM.
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Profit attributable to owners of the parent increased by 124.2%, with an annualized ROE of 13.9%.
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Brokerage commissions dropped by 8.5% due to a decrease in stock trading volume.
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Flow revenues in the wealth management division declined due to market uncertainty.
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FICC revenues decreased, particularly in the domestic market due to a sharp decline in interest rates.
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Trading-related expenses increased, impacting overall SG&A costs.
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Ordinary income in the wealth management division decreased by 22.1%.
Q: Can you elaborate on the significant increase in ordinary income for the second quarter? A: Kotaro Yoshida, Managing Executive Officer & CFO, explained that ordinary income reached JPY72.8 billion, up 93.1% from the previous quarter. This was driven by growth in asset-based revenues in the wealth management segment, record-high ordinary income in asset management, and increased revenues in the global markets and investment banking division. Additionally, gains from the acquisition of Aozora Bank shares contributed to non-operating income.
Q: What factors contributed to the record high interim dividend? A: Yoshida noted that the interim dividend reached a record high of JPY28, with a payout ratio of 50.6%. This was supported by a significant increase in profit attributable to owners of the parent, which was JPY53.7 billion, up 124.2%. The strong financial performance across various segments, including wealth management and asset management, underpinned this dividend increase.
Q: How did the overseas operations perform in the second quarter? A: Yoshida reported that ordinary income for overseas business totaled JPY4.6 billion, up 103.6% quarter-on-quarter. Europe saw improved revenues and earnings due to a recovery in equity primary and M&A revenues. Asia and Oceania maintained solid profits, while the Americas experienced profit growth from increased customer order flows in FICC.
Q: Could you provide more details on the performance of the wealth management division? A: The wealth management division saw net operating revenues of JPY60.6 billion, down 3.1%, and ordinary income of JPY15.9 billion, down 22.1%. Despite a decline in flow revenues due to market uncertainty, the transition to a wealth management business model progressed steadily, with increases in wrap-related revenues and agency fees for investment trusts.
