Good day, everyone, and welcome to today's Nomura Holdings third quarter operating results for fiscal year ending March 2025 conference call. Please be reminded that today's conference call is being recorded at the request of the hosting company. Should you have any objections, you may disconnect at this point in time.

During the presentation, all the telephone lines are placed for listen-only mode. The question-and-answer session will be held after the presentation.

Please note that this telephone conference contains certain forward-looking statement and other projected results which involve known and unknown risks, delays, uncertainties and other factors not under the company's control, which may cause actual results, performance or achievement of the company to be materially different from the result, performance or other expectations implied by those projections.

Such factors include economic and market conditions, political events and investor sentiment, liquidity of secondary market, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, number and timing of transactions. With that, we would like to begin the conference. Mr.

Takumi Kitamura, Chief Financial Officer, please go ahead..

Good evening. This is Takumi Kitamura, CFO. Let me explain our financial results for the third quarter of the fiscal year ending March 2025 using the document titled Consolidated Results of Operations. Please turn to Page 2. Group wide net revenue increased 4% quarter-on-quarter to JPY502 billion. Income before income taxes grew 4% to JPY138.3 billion.

Net income was JPY101.4 billion, representing a 3% increase over last quarter. EPS came to JPY33.08 and annualized return on equity came to 11.8%. This was the seventh straight quarter of profit growth building on what was already a strong previous quarter, reflecting the positive outcomes of strategic initiatives undertaken to date.

Improving profitability in our international operations has been a management priority and we have made steady progress. In global markets, we made progress with portfolio diversification, and in each region, we were able to increase revenue across a wide range of products.

Profit contributions from Laser Digital, Nomura's digital assets subsidiary, have also begun and income before income taxes in the three international regions came to JPY51.8 billion, increasing by 30% over last quarter.

The international business came to account for nearly 40% of our group-wide income before income taxes and our effective tax rate fell to 25% as some international entities made use of tax loss carryforwards. Three segment income before income taxes, shown on the bottom right, was JPY127.5 billion.

This was in fact the highest level in 17.5 years since the quarter ended June 2007. In wholesale, income before income taxes increased steeply, led by the international operations, while in wealth management and investment management, stable revenues rose to record high levels amid net Inflows.

Before going into each business in detail, let's first take a brief look at the results for the first nine months of the fiscal year. Please turn to Page 3. As shown at the bottom left, net revenue for the period came to JPY1,439.8 billion, up 29% from the same period in previous fiscal year.

Income before income taxes grew 106% to JPY374.2 billion, while net income increased by 146% to JPY268.8 billion. EPS came to JPY87.66 and ROE was 10.4%. The table at the bottom right gives a breakdown of income before income taxes. All divisions reported strong gains with three segment income before income taxes totaling JPY336.5 billion.

This means that nine months into the fiscal year, we have already gone nearly JPY50 billion over the target of JPY288 billion for the fiscal year ending March 2025, which we announced at our Investor Day in May 2023. Net revenue in wealth management increased by 18%, led by the provision of comprehensive asset management services.

Net inflows and improved performance lifted recurring revenue assets such as investment trusts and discretionary investments to a record high, resulting in an increase by 30% of recurring revenue.

In investment management, the asset management business has shown strong performance with assets under management climbing to a record high and business revenue also at the highest level since the division was established. Both divisions continued to build up stable revenues, meaning revenues linked to the amount of client assets.

In wholesale, all business lines, fixed income, equities, and investment banking, and all regions reported stronger revenues compared with the same period last year, underscoring progress in diversifying our revenue sources.

Also worth highlighting is that we were able to realize greater operating leverage in all divisions, thanks to continued cost controls. Revenues across the three divisions rose by 27% while costs increased only 12% with the result that income before income taxes came to 2.1 times the previous year's level.

The income before income taxes margin improved from 16% to 26%. Now let's take a look at third quarter performance by segment. Please turn to Page 6. The percentages I refer to here are all quarter-on-quarter comparisons.

Wealth management net revenue was flat quarter-on-quarter at JPY116.3 billion, and income before income taxes grew 2% to JPY46.2 billion. This was the seventh consecutive quarter of growth in income before income taxes, which reached its highest level in the nine and a half years since the quarter ended June 2015.

As shown in the lower left, flow revenue fell slightly to JPY65.9 billion. There was a slight decline in revenue related to Japanese stocks and bonds, but we saw revenue growth in investment trusts and foreign stocks. Recurring revenue rose to a record high of JPY50.4 billion.

Recurring revenue as a category includes investment advisory fees that are recognized every second quarter and fourth quarter, which means that these fees were absent in this quarter.

However, we were able to completely absorb the impact through our efforts across a wide range of other recurring business, including investment trusts, insurance and discretionary investments.

Thanks to continuous cost reduction, the division's net non-interest expenses held at roughly JPY70 billion with the result that the recurring revenue cost coverage ratio rose to 72%, up 2 percentage points from the last quarter. This added further to the stability of earnings in the division.

Please turn to Page 7 for an update on total sales by product. Total sales declined by 11% quarter -on-quarter to JPY5.2 trillion. Within that, sales of stocks fell by 12%.

Demand for Japanese stocks slowed as investors stayed largely on the sidelines in October ahead of major political events in the US and Japan, and the market subsequently stayed rangebound. In bonds, we saw an increase in sales of Japanese government bonds to retail investors as rising yen interest rates made them more attractive.

Sales of foreign bonds fell, however, in part due to the absence of major primary transactions, but also because demand for other products increased, including foreign stocks and a newly established publicly offered investment trust that invests in private credit. Sales of investment trusts increased by 9%.

We saw growth in demand for US growth stock investment trusts as well as the aforementioned trust that invests in private credit. Sales of insurance products and discretionary investments declined quarter-on-quarter, but held up fairly well in absolute terms.

Investment trusts, discretionary investments and insurance products are all product categories in which clients tend to be responsive to the advice and suggestions of our sales partners and all have continued selling well. Page 8, you will see that we are ahead of target in all of our KPIs for the fiscal year.

The bar chart at the top left shows net inflows of recurring revenue assets of JPY282.2 billion. Net inflows of recurring revenue assets in the first three quarters of the fiscal year exceeded JPY1.1 trillion, already going well beyond our full-year target of JPY800 billion.

At the top right, you can see that recurring revenue assets at the end of the quarter came to JPY24.9 trillion, which is higher than our target of JPY22.3 trillion. The figure at the bottom left shows the number of flow business clients at 1.48 million, up 230,000 from a quarter ago. We have already reached our full-year target of 1.46 million.

We saw contributions from effective approaches by our sales partners in client-facing channels, from new client acquisitions in conjunction with the Tokyo Metro IPO and other primary transactions, and from clients entering into transactions their own accord through their NISA accounts. Please turn to Page 9 for investment management.

Net revenue was down 18% at JPY45.7 billion, while income before income taxes fell 41% to JPY18.9 billion. A major factor was a decline in American Century Investments related to valuation gain counted under investment gains and losses.

At the lower left, you will see that business revenue, a stable revenue source, came to JPY42 billion, the highest level since the division was established.

The asset management business had another strong quarter with net inflow for the seventh straight -- seventh quarter in a row and assets under management climbing to a record high of JPY93.5 trillion. Revenue also increased QonQ for the aircraft leasing business of Nomura Babcock & Brown.

Please turn to Page 9 for an update on the asset management business, which is the key source of business revenue for investment management. Assets under management at the end of December sit at JPY93.5 trillion.

As shown in the chart at the lower left, net inflow came to JPY260 billion, which looks low in comparison to the previous three quarters, but investment trust business saw an inflow of JPY490 billion, and the product mix improved, thanks to inflows into private assets, global equities, and privately placed investment trusts where management fees are relatively high.

At the lower right, you will see that alternative assets under management rose past JPY2.5 trillion. This was an increase of JPY400 billion in the three months since the end of September with JPY180 billion of data inflows. Next, please turn to Page 11 for wholesale. Net revenue increased 10% to JPY290.5 billion.

Global markets revenues increased for the seventh straight quarter, while investment banking revenues were at the highest level for the period, over which comparisons are possible, stretching back to the fiscal year ended March 2017, as shown on the bottom right.

The three overseas regions of America, EMEA and AEJ, all performed well with combined net revenue up 23%. With segment revenue growing and expenses only rising 5%, the cost to income ratio improved to 79%.

Income before income taxes of JPY62.4 billion represents the highest level in the four quarters -- four years since the quarter ended December 2020. Please turn to Page 12 for an update on each business line. First, global markets net revenue increased 8% to JPY239 billion.

There was a slow start to the quarter in October, ahead of major political events in Japan and the US, but net revenue improved month-on-month. Fixed income net revenue increased 9% to JPY139.9 billion. In macro products, revenues from FX/EM increased in EMEA and AEJ.

In spread products, revenues from securitized products were at a record high, particularly in the Americas, and with increased visibility over US rate cuts, there was strong demand for a wide range of sub-products including in the origination and financing businesses. Credit revenues increased in EMEA and AEJ.

Equities net revenue increased 6% to JPY99.1 billion. Equity products revenues were particularly strong in the Americas and the revenues also grew in AEJ, as we expanded our franchise. Please turn to Page 13 for investment banking.

Net revenue increased 22% to JPY51.5 billion with multiple M&A and ECM deals contributing to revenue increase in all regions. By product, advisory revenues grew sharply as we worked to monetize transactions in Japan, EMEA and the Americas, including several financial sponsor and cross-border deals. Revenues in financing and solutions also increased.

ECM revenues were particularly strong, driven by deals related to the unwinding of cross shareholdings and several large IPOs including Kansai Electric Power and major IPOs including Tokyo Metro, Rigaku holdings and Kioxia Holdings. These are shown on the right. ALF revenues rose on contributions from several refinance and acquisition finance deals.

Please turn to Page 14 for non-interest expenses. Group-wide expenses rose 4% to JPY363.7 billion. Compensation and benefits were up 9 -- sorry, 3% at JPY190.9 billion, mainly due to an increase in stock-based compensation, following the rise in our share price.

Other expenses totaled JPY50 billion, up by around JPY9 billion from the previous quarter due to a rise in professional fees and transaction related expenses and an increase in expenses related to the disposal of software. Please turn to Page 15 for an update on our financial position.

The table on the bottom left shows Tier 1 capital of roughly JPY3.6 trillion, up by JPY0.2 trillion from the end of September. Risk-weighted assets also rose by JPY0.8 trillion to JPY19.9 trillion, resulting in a Tier 1 capital ratio of 18.1% and a common liquidity Tier 1 ratio of 16.3% as of the end of December.

This concludes our view of our third quarter results. To wrap things up, we achieved annualized ROE this quarter of 11.8%, the highest since the quarter ended December 2020.

At that time, wholesale accounted for about 60% of three segments income before income taxes and the profit structure was quite skewed with rates products accounting for nearly all of the wholesale earnings. Now earnings are well balanced across all three divisions. This did not happen overnight.

We think the path that we have strategically followed is finally leading to tangible results. Recurring revenue in wealth management and business revenue in investment management, both of which are sources of stable revenues, increased to an annualized level of JPY370 billion, lifting baseline pre-tax ROE to around mid-4% range.

Pre-tax ROE comes to around 6% when we take into account recurring business such as financing in wholesale. We think further accumulation of such highly stable and recurring profits will increase the stability of earnings and boost our intrinsic earnings power. We aim to achieve consistent ROE of 8% to 10% or more by 2030.

This means we want to achieve 8% even when market conditions are challenging, and we will aim to achieve more than 10% when market conditions are favorable.

We will endeavor to build a franchise that can always aim higher while striving to lower our cost of capital by steadily achieving our minimum ROE target of 8% backed by the accumulation of stable recurring ROE, as mentioned earlier.

Wealth management and wholesale have gotten off to a somewhat slow start in January compared with the third quarter, but the revenue levels remain acceptable. We continue to aim for bottom line growth while delivering operating leverage as we maintain cost controls.

As we announced today, for an effective use of management resources, our subsidiary, Nomura Properties, has signed a sale agreement for the transfer of the land and building of the training center it owns at Takanawa.

The execution of the sale is scheduled from mid-March to mid-April this year, and following the completion of the asset transfer, we expect to book a pre-tax income of approximately JPY56 billion. In closing, Nomura will celebrate its 100th anniversary on December 25th, 2025.

To express our sincere gratitude to our shareholders for their support over the years, we will pay a commemorative dividend of JPY10 per share to shareholders of record as of March 31st, 2025. We plan to steadfastly forge ahead in pursuit of our purpose. We aspire to create a better world by harnessing the power of financial markets. Thank you..

We have a question-and-answer session now. (Operator Instructions) The first question is from SMBC Nikko Securities, Mr. Muraki. Muraki san, Please go ahead..

Thank you. This is Muraki from SMBC Nikko. Two questions, please. First, about wholesale fixed income business. On Page 12, and this time, the US, the Americas had securitization, and Europe, rates and FX was strong and other US players and look at the other brokers, US securitization seems to have been very strong according to their comments.

So the environment was good, but also -- the reasons for the strong revenue environment.

And how do you see the sustainability of this current strong revenue environment? What are the upside and downside risks of the environment? And Kitamura san, you commented in the past about the securitization business and there are some liquidity regulations that have effect on the securitization business.

So when you think about the profitability of fixed income business, are you happy with the current profitability in line with the regulations? My second question is the sale of the real estate which you have announced.

And from an asset efficiency perspective, there's real estate and also the stocks of NRI, which you have been selling in several phases.

Are there any other targets to further improve asset efficiency? And what is the process? What kind of frequency do you plan to sell assets? Are you going to sell at one go or are you going to sell it step by step? Is that how we should assume it? Any hints there, please..

Thank you. This is Kitamura. Thank you, Muraki san. Your first question about wholesale fixed income. Yeah. As you pointed out, in the US, securitization business was very strong, securitized products. And our securitized products business consists of loans, sales, secondary trading, it's all mixed together.

And for the loan part, the funds become stagnant. So we are trying to improve the turnover of the funds as much as possible in our business. And after we originate the loans, we promptly sell those positions and we control the amount that we hold on our book. And as we always say to the business side, please recycle resources.

In terms of profitability, it depends on what we use as the denominator to calculate, but we have secured sufficient ROE, we believe. And in relation to securitized products, we are diversifying our portfolio within the securitization book. So it's not just mortgage. We also have CLO, private credit.

We have various product lines in the securitization business. So we are further diversifying this business. So whether we are satisfied with this current level of profitability, yes, securitized products and FX rates have recovered quite nicely this year, this period, but for rates products, I think there is some more upside that we can take frankly.

In Q3, we are seeing signs of recovery, and compared to the bottom two years ago, we are definitely in a recovery trend, but there still is room to generate earnings in this business. We are not fully leveraging our capabilities, we think. And your second question about the real estate and properties that we own and the sale of those properties.

As you know, in December 25th, 2025, we have the 100th anniversary coming up and our new headquarters building will be completed in 2026. So we have training facilities in this new headquarter building. So we decided to sell the Takanawa property, considering the usage of the properties.

And the current -- we also considered the state of the current real estate market and the future usage, and we chose to sign the disposal or -- sale and disposal contract at the time. And you asked about NRI stocks and other stocks and the disposal of such stocks. We currently do not expect to change the ratio of our holdings at this moment.

Thank you..

Thank you. This is Muraki again. On Page 22, you show the P&L by region. And the other day, in the US, wholesale was quite strong and Europe was a challenge according to the CFO, but this time, there's Laser Digital profit contribution, that's booked in Europe, I think. And for wholesale ROE, the target is 6% to 8% on a pre-tax level.

And for Europe and the Americas, is it within that range that you are targeting?.

Yeah. Thank you for the question. The disclosed numbers are categorized by legal entity. So it's a bit different from the business performance that we track. And as you point out, in Europe this quarter, JPY16.2 billion of pre-tax income, and yes, Laser, the contribution from Laser is in that and it makes up a certain portion.

Meanwhile, the wholesale business, as I said earlier, is showing signs of recovery, especially for fixed income. We replaced positions last year and the trading environment has been improving. So our earnings capability is recovering significantly.

I think there is still room for improvement, but we are seeing signs of improvement and that is encouraging. In the US, we do have strong earnings capability..

Understood. Thank you..

The next question comes from BofA Securities, Ms. Tsujino. Please go ahead..

Thank you. I'd like to ask you about your ideas about shareholder return. This time, the full year dividend, well, 40% of dividend payout ratio. In addition to that, JPY10 will be added.

On the other hand, total return ratio of 50% or more is your policy that, I believe, you will continue, and there JPY10 commemorative dividend will be excluded from there. Then as far as I know based upon the information we have, the 40% return ratio is the number.

So for the full year, what is the sense that I should have? Earlier, you mentioned the gain on sale of property. When that's included, then the proceeds, some of which might be used for dividend payout, whether it is paid out in the fourth quarter or in the first quarter, I do not have clarity, but many things are now moving.

So this time you announced only the commemorative dividend, but at the end of April, when you announce full-year result, then remaining portion, in order to achieve 50% or more of return, you may announce buyback or any other additional shareholder return? Can we expect such announcement? And if profit is -- or proceed is booked in March -- or sorry, if the proceed is booked in April, then in order to reach 50%, the number you have to secure is now you have conducted share buyback.

So the amount of buyback could be smaller than in the past, so JPY56 billion could be received in April, given that possibility moving forward, Kitamura san, you will think about the plan. Is it the right understanding? So that's my first question..

Okay, Ms. Tsujino. So thank you for analyzing the headache I've been having. Regarding the JPY10 payout of commemorative dividend per share, that has nothing to do with the regular dividend payout. It's for the pure purpose of commemoration. So the 50% or more of return ratio based upon profit, that policy remains unchanged.

And regarding the timing of recognition of proceed from sale, that's not clear as of yet, but the proceed from sale will be used for shareholder return in the fourth quarter. So we still have two more months before we close the fourth quarter.

So we will monitor what the final numbers will be looking like and we will determine the most appropriate ways of conducting shareholder return policies. We may use shareholder return -- share buyback partially. So we would like to be open to various options. Though I did not give you a straight answer, but that's how I am thinking right now..

Regarding my second question, Mr. Kitamura, regarding investment trust, in wealth management, investment trust sale in November grew greatly. Then in December, it settled down. So private credit fund was originated newly.

And moving forward, as for private credit products, are you going to be conducting the marketing in a more stable manner? Then in that case, investment trust sales, that will involve different profile or products, so the sales might be put on a quite different trajectory from here or is it not going to be the case? Could you give me some sense?.

Thank you, Ms. Tsujino. As you say, private products are what we are strengthening right now, and our clients are becoming increasingly familiar with private products, but just because products are private, we do not sell just about anything. That's not the ideal approach of sale.

Since we deal with private products, product governance is essential from our viewpoint. We would like to apply the screening so that we can only deliver offer products that we are confident about.

So the frequency of launch of such products, even if we want to offer such products, since we want to be careful in screening products, it may not be so frequent and we would like to refer to the risk appetite of clients. So that's how we are going to recommend or offer products to customers..

Thank you. Thank you, Mr. Kitamura. Your answer gave me reassurance. Thank you..

The next question is from Mr. Watanabe from Daiwa Securities. Watanabe san, please go ahead..

Thank you. This is Watanabe from Daiwa. Two questions, please. First is about wealth management.

With the tightening of rules when visiting clients, has that had an impact on your sales, prebuilds activities? And if you look at the flows, there seems to be almost no impact, I think, but any thoughts there, please? Second question is about your expenses, costs.

And in wealth management, you achieved revenue growth, but the absolute amount of cost has declined.

And going forward, do you think you can maintain the cost-to-income ratio? And in wholesale, cost-to-income ratio, 79%, and -- it's recovered to 79% and you've achieved the target of 80%, but will you increase costs going forward? So any thoughts on the direction of costs, please..

Thank you. This is Kitamura. First, about wealth management, client visits and the rules. Realistically, there has been not that much impact on our business, I think, and we already have a relationship of trust with clients and we do communicate with such clients.

And of course, some customers have given us very harsh criticism, but they still continue business with us in a lot of cases. And that's why we were able to achieve the numbers that we are showing this time. Meanwhile, with the tightening of rules when visiting clients, the acquisition of new customers has slowed down slightly, I've heard.

So in that sense, there has been some impact. We want our customers to feel comfortable in dealing with Nomura and we will work -- we will do our utmost to regain our trust. Your second question is about costs.

In wealth management, we have a very stable cost control and we worked on cost reduction quite early, and those results are showing up in the numbers and they are sticking. And going forward, on the IT architecture side, I think there still is room for change, for improvement, and in doing so, we will need some improvement -- investment.

So in the short term, there's a chance that costs may go up a little, but that cost increase will be offset by the cost reductions in the future, and that's why we will be making these investments. We will try to control the total amount as much as possible and make some investments to achieve future cost reductions.

And in wholesale, we are finally at 79% cost-income ratio, and we finally have a decent number. And this was thanks to top line growth as well as thorough cost control. And we will continue to control our costs. This isn't just about one fiscal period and we want to give comfort to our stakeholders. So we will continue our cost reduction efforts.

And compared to wealth management, we started a little later, two quarters late. So we expect to see the results in our P&L going forward. Meanwhile, there's very strong inflationary pressure outside of Japan, even more than in Japan.

So while we control our costs, that will be somewhat offset by inflation, which is unfortunate, but we will continue working on cost control. Thank you..

Thank you. This is Watanabe. About wealth management, the IT architecture investment that you mentioned, when will this take place, from when to when? And how much will be the size? If you have any ideas, please..

Yes, this is Kitamura. It's already started partly actually, and this year, we have not started a full-fledged investment, but next year, we will make some investments. And this is an investment, so it will not immediately show up in our P&L. There will be a time lag.

And as for size, I don't think we disclose that, so apologies, we will refrain from commenting, but we will of course be mindful of the bottom line when making these investments..

Understood. Thank you very much..

Now we move to next question..

The next question..

As we couldn't confirm your affiliation, please state your company name and your name after hearing unmuted announcement. Now unmuted..

I'm [Aray] (ph) from J.P. Morgan Securities. I have two questions. First question is about the US business revenue and profit. Looking at geographical profit or revenue of wholesale, US top line seems to be growing significantly. On the other hand, looking at profit in Page 22, the profit amount is coming down.

So how should I interpret these numbers? My second question is regarding the investment banking pipeline accumulation, and given the situation in January, what is the revenue forecast for the fourth quarter and next fiscal year? So those are my two questions. Thank you..

Thank you very much for your questions. Regarding your first question, Page 22, the numbers on Page 22, so these numbers are based upon legal entities and they do not necessarily show wholesale numbers. American Century Investments related -- investments gain loss numbers are included here.

And as I mentioned, as I touched upon investment management division, investment gain is a positive, but compared to last year, the gain amount is down and majority of that comes from ACI related loss. So aside from that factor, Americas pre-tax profit has greatly increased. That's our analysis.

As for IB pipeline, all in all, continuously centering around Japan, we see strength especially M&A and ECM transactions. Especially advisory business recently has enjoyed increasing customer activities amid the changing environment and M&A pipeline is staying at an elevated level.

As for overseas, we have solid pipeline and the deregulation -- deregulatory move of Trump administration as well as the tax decrease, those moves will be beneficial to M&A industry. However, our overseas IB business is not full line [ph].

So our performance will not be in completely parallel with industry trend, but we are focused on accumulating our pipeline. As for ECM, we continue to see high level performance whether it is PO or IPO in terms of pipeline. Indeed, due to market changes, our pipeline is affected, but under the current environment, our pipeline remains at a high level.

And this fiscal year, we see the sale of strategically held shares even though we see the peak to be reached at some point in the future, but the current trend is expected to continue for some time. Thank you. That's my answer..

Thank you very much, Mr. Kitamura..

The next question is from SBI Securities, Mr. Oscar..

Hello, this is Oscar from SBI Securities. Hope you can hear me..

Yes, thank you..

Two questions. First is about Laser Digital that you mentioned. How much was the profit, please, if you could give me some color or hints? That's my first question..

Apologies, we cannot disclose the numbers, but Laser Digital started business in 2022. It's only been two years since then and it turned profitable. And going forward, I think there's signs of -- positive signs, especially with the Trump market, which is a tailwind.

And in the mid to long term, crypto assets will become a more regular asset class and that trend is going to continue. So the environment is positive for Laser Digital. When it comes to crypto and digital assets, there is a lot of volatility.

And in this quarter, we achieved strong numbers, but there will be volatility going forward, and we will -- that's why we will -- another reason why we'll refrain from disclosing the numbers..

On Page 22, Europe, QonQ improvement in profit, and I think -- is it included here?.

No, not all of it. No. Not all of it, no. Not all of this is Laser..

I see. So you have your core businesses and the market factors was a bigger factor, I believe..

There's Laser contribution, and there's also the wholesale business like rates et cetera. And we cannot give you the exact breakdown..

Okay. Understand.

My second question, Page 26, you talked about the Hiroshima mandate, which didn't have -- Hiroshima case, which didn't have much impact, negative impact from that incident, but for net inflows of cash and securities, was there no impact from the Hiroshima incident? And you have achieved strong numbers, but Q2, Q3, there wasn't much change, and for wealth management overall, it is negative, but are there any other factors aside from the incident?.

Yes, thank you. On Page 26, Oscar san, you mentioned the negative number or is wealth management negative overall. And this includes the actions by the corporate clients. So this is kind of an irregular number. I think you should focus more on the retail only line.

And since a few years ago, we have started adding this retail only disclosure and that's the reason for that. And if you look at the retail only line, you can see how it was positive in this quarter as well and we achieved inflows for nine consecutive quarters. So I don't see any major issues here. Thank you..

Yes.

This JPY467 billion, JPY168 billion, if we look at the retail only, is there any reason for this?.

Well, October is -- October was somewhat slow. There was the Prime Minister election in Japan and the US presidential elections in early November and customers were waiting and seeing. And if you look at within the quarter, October was relatively slow..

Okay. Understand. Thank you very much..

The next question comes from Citigroup Securities, Mr. Niwa..

Thank you. I am Niwa from Citi. I have two questions.

So I'm deviating from the earnings release, but regarding the policy holding and 2030 management ambition of yours and regarding the policy holding of shares, the policy holdings held by Nomura, what is your policy in the securities report? I do understand you have provided explanation, but environment is changing now.

So could you comment on the policy which may not be necessarily needed? So what is your view and how should I think about your policy holdings? And regarding ROE target for 2030, for you to conduct upward revision, what criteria needs to be met? So the vision seems to be a word that's not appropriate because the target seems to be too low right now.

Then why are you not raising the target, making upward revision? Could you comment on those? Thank you..

Thank you for the question, Mr. Niwa. Regarding your first question, I didn't understand the intention of your first question. So are you saying that we should increase the policy holding of shares? What was your intention, Mr.

Niwa?.

Niwa speaking. So my intention, my message was you could completely eliminate policyholding of shares..

Kitamura speaking. So we have disclosed our position, but quite quickly, we are setting down our position, and ratio against Tier 1 capital right now is 2.8% or only around 3%, and 3% is affected by the stock price increase.

So we have been quite aggressive in selling down our position in policy holdings, and that's our stance and we have a target number of shares to hold and we are quite proactive in selling those positions, but in the sense of the number of names, when it comes to the sale of unlisted, non-listed stocks, it's difficult because we do not have market.

So we have been quite aggressive in selling the shares held. But even though we have made progress and we have no intention of slowing down our initiatives, but it will be quite a challenge for us to completely eliminate the holdings. However, in terms of direction, shares we do not have to hold, we do not intend to hold.

Regarding your second question, why we are not raising the target, well, our target was set May two years ago, ROE of 8% to 10% plus. So rather than focusing on that range from 8% to 10% plus, but what's more important is for us to achieve profit no matter what the market environment is.

No matter poor the market environment is, we would like to achieve at least 8% in ROE steadily. So that's the background of our target. So in the past, as we held 8% to 10% target, many people told us, many people asked us how are we going to achieve that target. They didn't see the pathway towards achieving that target.

We received such quite harsh comment. So we have made efforts to achieve our ambition. In the last two quarters, we could achieve a level above 11%. So when situations change, people's comments also change. That's how I felt. But baseline ROE and recurring business expansion are our focus so that we can increase our underlying ROE. That is our first step.

And on top of that, if market environment is favorable, then 10% plus, just like 11% this time or we could aim even higher. That's our thinking.

Did that answer your question?.

Thank you very much..

The next question is from Bank of America Securities, Tsujino san..

Thank you. Tsujino again.

About Laser Digital profit, this is in Europe, and in terms of segments, where is it booked? And from an accounting perspective, which line -- which item is it?.

Yes. This is Kitamura. In terms of segment, it is in others of others. Sorry for the complication. And in terms of the accounting item, it is trading P&L. Does that answer your question? So it's basically trading in P&L..

Okay. That's another difficulty for me. Okay, understand..

It's time to finish, and we would like to conclude question-and-answer session. If you have some more questions, please ask our Nomura Holdings IR department. In the end, we would like to make closing address by Nomura Holdings..

This is Kitamura. Thank you, everyone. In the second and third quarters, we could achieve ROE exceeding 11%. And our medium to long term initiatives that we have worked on seem to be delivering results that gives us confidence as management members, but we are not overly optimistic.

We will stay focused on stabilizing top line, and we will stay focused on diversifying revenue streams while controlling cost and controlling -- managing risks. So we will stay attentive to all those things.

JPY268.8 billion of net profit has been achieved recently, and the highest level, record high of net profit may be just around the corner, but by working on the themes that I have worked on, we would like to keep up our efforts so that we can deliver a good performance. Thank you very much for your continued support. Thank you..

Thank you for taking your time. And that concludes today's conference call. You may now disconnect your lines..