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Nomura's first-quarter profit soars more than 10-times after horror year

Nomura's first-quarter profit soars more than 10-times after horror year
FILE PHOTO: A man walks past a signboard of Nomura Securities outside its branch in Tokyo, Japan, February 2, 2016. REUTERS/Yuya Shino/File Photo -
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Yuya Shino(Reuters)
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By Takashi Umekawa

TOKYO (Reuters) – Nomura Holdings Inc <8604.T>, Japan’s biggest brokerage and investment bank, said on Wednesday its first-quarter net profit soared more than 10 times after restructuring its business portfolio.

April-June profit came in at 55.8 billion yen (£423.17 million) versus 5.2 billion yen a year earlier. The result compared with the 14.9 billion yen average of two analyst estimates compiled by Refinitiv.

In the last financial year, the brokerage reported an annual loss for the first time in a decade due primarily to weakness in its wholesale division.

While the division has been Nomura’s biggest drag, it posted 20 billion yen in pretax profit in the first quarter due particularly to recovery in its U.S. fixed income business.

Nomura’s recent bumpy road stretched into this financial year when the financial watchdog in May ordered it to improve internal controls after an information leak related to listing and delisting criteria at the Tokyo Stock Exchange.

It subsequently missed a chance to lead manage a mammoth sale of shares in Japan Post Holdings Co Ltd <6178.T> as the government took the leak into account when choosing underwriters.

Chief Executive Koji Nagai said he would take a 30% pay cut for three months following the data leak debacle, and at a general meeting in June, shareholders voted for him to remain in his position.

But the yes-vote ratio came in at 61.7% compared with 96% a year earlier, according to Nomura.

“We can’t say that the issues didn’t affect our performance at all,” said Chief Financial Officer Takumi Kitamura at an earnings briefing on Wednesday. “Results of our structural reform started to emerge”.

(Reporting by Takashi Umekawa; Editing by Christopher Cushing)

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