January 30, 2020 / 6:27 AM / 20 days ago

UPDATE 2-Japan's Nomura posts 4th straight quarterly profit, led by wholesale business turnaround

* Q3 pretax income for wholesale business Y43.2 bln

* Cost cuts close to 70% of long-term Y140 bln target by end-Dec

* Joint COO Okuda will become CEO in April

* Other joint COO Morita to become head of brokerage unit (Adds executive quote, analyst comment)

By Takashi Umekawa

TOKYO, Jan 30 (Reuters) - Nomura Holdings Inc, Japan’s biggest brokerage and investment bank, on Thursday posted its fourth straight quarterly profit, primarily due to a turnaround at its wholesale business serving businesses and institutional investors.

Net profit in the three months ended December came in at 57.1 billion yen ($521 million), beating one estimate of 38.94 billion yen by brokerage Mitsubishi UFJ Morgan Stanley.

Nomura, which is in the midst of a management reshuffle, had recorded a 95.3 billion yen net loss in the same period last year, its heaviest quarterly loss in nearly a decade, as it suffered a big write-off in its wholesale business.

Pretax income for the wholesale segment came in at 43.2 billion yen for the three months through December compared with a 95.9 billion yen pretax loss a year ago.

The retail division posted 17.6 billion yen in pretax income, up 26% from a year earlier, as market conditions improved, Nomura said. Japan’s benchmark Nikkei share average rose about 8.1% in the three months through December.

“The results were partly supported by market recovery. There are still things that we can do to get our business back at cruising speed,” Chief Financial Officer Takumi Kitamura said at an earnings briefing on Thursday.

Nomura has been in a heavy cost-cutting mode for the past year and is aiming for about 140 billion yen in cost cuts by March 2022, with close to 70% of that achieved as of end-December, Kitamura said.

The investment bank has announced it is promoting joint Chief Operating Officer (COO) Kentaro Okuda as its new chief executive, replacing Koji Nagai, its longest-serving CEO in three decades, who will become chairman. The changes are effective April 1.

Okuda in December pledged to speed up the pace of reform at Nomura.

“Although the cost cut has been done relatively smoothly so far, (Nomura’s) retail division reform is one of challenges lying ahead,” said Toshihiro Matsuo, an analyst at S&P Global Ratings in Tokyo. “I am looking closely at how Nomura deals with the cost reduction while maintaining profitability.”

Nomura also announced joint COO Toshio Morita would become the group’s representative executive officer in April and remain as a head of the core unit Nomura Securities, adding it would abolish the COO position.

$1 = 109.7000 yen Reporting by Takashi Umekawa; Additional reporting by Yuki Nitta; Editing by Muralikumar Anantharaman and Kenneth Maxwell

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