The Tokyo-based financial services company, Nomura Holdings, has announced its Q1 financial figures for 2021. Nomura’s figures have shown that despite making a profit for the Q1 period, the revenue and profit that the company has brought in is still down from the comparable period in 2020.
After bringing in revenue of ¥460.7 billion during Q1 of 2020, Nomura saw a fall of 23.3% for Q1 of 2021. This equates to more than ¥100 billion and sees the company bringing in a revenue of ¥353.3 billion.
A large portion of this decrease in revenue comes from the winding up of a US client. The financial report that Nomura released made it clear that ¥65.4 billion of the reduction in revenue was due to the transactions from the US client no longer being part of the balance sheet.
Despite the fall in revenue, Nomura did have some positive showings on its balance sheet. Overall pre-tax expenses for the Q1 2021 period fell from the same period in 2020. There was a fall of 1.5%, which took expenses down to ¥274.7 billion from ¥278.9 billion in 2020. The drop in expenses was not quite significant enough to ensure the impact on profits was minimal.
The pre-tax profit for Nomura in Q1 2020 saw the company take ¥181.8 billion. The 2021 pre-tax profit saw a fall of 56.8%, dropping down to ¥78.5 billion. After taxes, it saw the Q1 2020 profit drop from ¥144.3 billion to ¥50 billion. This is negative growth of 65.4%.
The main reason for the profit being so much lower for 2021 compared to 2020 is that revenue has fallen much more significantly than expenses. A 23.3% fall in revenue equates to over ¥100 billion. The 1.5% fall in expenses equates to just ¥4.2 billion.
As a result of the negative growth for Q1 2021 shareholders in Nomura also saw a drop in the return on their equity. After a 21% annualized return for Q1 2020, 2021 saw that drop by around two thirds to a 7.1% annualized return.
Nomura states in the financial summary that it believes the Covid-19 pandemic had an impact on the figures, and has covered this in more detail in the risk factors in its annual securities report.
