Nomura Holdings Inc

TSE:8604

Q1-2026 Earnings Call

[Operator]

Good day, everyone, and welcome to today's Nomura Holdings First Quarter Operating Results for Fiscal Year ended March 2026 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. [Operator Instructions] Please note that this telephone conference contains certain forward-looking statements 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 results, performance or other expectations implied by these projections. Such factors include economic and market conditions, political events and investor sentiments, 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'd like to begin the conference. Mr. Hiroyuki Moriuchi, Chief Financial Officer. Please go ahead.

[Hiroyuki Moriuchi, executive]

Moriuchi, CFO speaking. Thank you very much for joining us this evening. Let me brief you on the results of operations for the first quarter. First of all, please turn to Page 2 of the document. This is a page on the executive summary. Group net revenue came in at JPY 523.3 billion, up 16% over last quarter. Income before income taxes grew 64% to JPY 160.3 billion, while net income was JPY 104.6 billion, an increase of 45% compared with last quarter.

The introduction of reciprocal tariffs by the United States and increase in geopolitical risk led to an uncertain market environment, but all 4 divisions, including the newly established Banking division achieved growth in both revenues and profits compared with last quarter. In addition, the sale of fixed assets by Nomura Properties announced last quarter contributed to income before income taxes of around JPY 56 billion in the first quarter. As a result, EPS was JPY 34.04 and annualized ROE was 12%.

Next, let's look at the performance of each business, starting with Wealth Management on Page 5. Wealth Management first quarter net revenue increased 6% to JPY 105.8 billion and income before income taxes rose 8% to JPY 38.8 billion. Despite the stock market's sharp decline in April, the provision of consulting services tailored to clients' needs resulted in an increase in primary bond sales and secondary stock transactions that captured market fluctuation, and flow revenue et cetera, grew 16%.

Partly owing to the newly established Japan stock investment fund, recurring revenue assets saw a net inflow for the 13th consecutive quarter. Meanwhile, the recurring revenue cost coverage ratio over the last 4 quarters reached a high level of 69% owing to our efforts to keep costs down.

Please turn to Page 6 for an update on total sales by product. Total sales increased 24% to JPY 6.7 trillion. Sales of stock rose sharply compared with the previous quarter partly owing to a tender offer worth more than JPY 1 trillion. Sales of bonds increased 42%, owing to large primary transactions, including unsecured SoftBank Group corporate bonds.

We will now look at KPIs on Page 7. As shown on the top left, recurring revenue assets saw a net inflow for the 13th consecutive quarter at JPY 278.9 billion. Meanwhile, as shown on the top right, recurring revenue declined versus the previous quarter. This was because of a decline in recurring revenue assets during the quarter as a result of the decline in stock prices in April and because of the absence of investment advisory fees in the first quarter, which are collected on a half yearly basis. However, owing to the net inflows of recurring revenue assets and market recovery, recurring revenue assets recovered to JPY 24.6 trillion at the end of June.

Next, please turn to Page 8 for Investment Management. Net revenue was up 18% to JPY 50.6 billion, while income before income taxes rose 39% to JPY 21.5 billion. As you can see on the bottom left, investment gain and loss improved sharply quarter-on-quarter to JPY 9.9 billion. This reflected an improvement in investment related to American Century Investments and driven by private equity investment firm Nomura Capital Partners.

Business revenue fell 6% owing to a decline in Nomura Babcock & Brown net revenues, and the lower performance fee compared to the previous quarter, but asset management fees which make up the lion's share of business revenue remained solid.

Please turn to Page 9 for an update on the Asset Management business, which is the key source of business revenue. As you can see on the top left of the page, assets under management at the end of June hit a record high level of JPY 94.3 trillion, owing to market recovery. Net inflows came to around JPY 108 billion, as shown on the bottom left, with net outflows from the Investment Trust business totaling around JPY 207 billion and net inflows to the Investment Advisory and International businesses of around JPY 315 billion.

In the Investment Trust business, investment trusts, excluding ETFs and MRFs saw net inflows of around JPY 280 billion, driven by newly established Japanese equity investment funds, while ETF saw outflows of approximately JPY 670 billion. These ETFs outflows are presumed to be due to selling by certain investors, individuals waiting to reinvest and profit taking. Despite net outflows related to global equities, the investment advisory and international businesses saw net inflows owing to inflows into yen bonds and international high-yield bonds.

As you can see in the bottom right, we continue to build out our private asset businesses steadily, while the yen strengthened during the quarter. Alternative assets under management reached a record high, driven by continued growth in net inflows.

Please turn to Page 10 for Wholesale. Wholesale net revenue rose 1% to JPY 261.1 billion and income before income taxes increased 12% to JPY 41.9 billion. Global Markets revenues increased 8% and Investment Banking revenues fell 27% dropping back after a strong Q4 performance, but still reached the highest level for Q1 since fiscal year 2016 and '17, the first fiscal year for which a comparison is possible.

Please turn to Page 11 for an update on business line performance. Firstly, Global Markets net revenue increased 8% to JPY 223.1 billion. Fixed income net revenue was up 18% at JPY 124.8 billion. Let's look at the product breakdown. In Macro Products, rates successfully monetized increased market volatility and client flows, resulting in substantial revenue growth in Europe. FX emerging revenues rose sharply in Asia. In Spread Products, credit revenues grew in Japan and Europe as the business successfully captured client flows and the Securitized Products maintained strong momentum driven mainly by originations in the U.S.

Equities net revenue fell 3% to JPY 98.3 billion. Equity Products net revenue was driven by strong performance in Derivatives business in the Americas. Execution Services revenue fell following a strong performance in the Americas in the previous quarter.

Please turn to Page 12 for Investment Banking. Net revenue was JPY 37.9 billion, down 27% from the previous quarter when performance was particularly favorable. That said, as seen on the bottom right, it was the highest amount on record for the first quarter of the fiscal year based on the comparable data going back to fiscal year 2016, '17. Net revenue was driven by business in Japan, reflecting ongoing efforts of companies in Japan to improve capital efficiency and achieve growth.

By product in advisory, many M&A deals, chiefly in Japan were announced and completed, including deals expected to be profitable after the second quarter. In the league tables from the period from January through the end of June this year, in Advisory, we ranked highest in the Japan-related M&A league table and 11th in the global M&A league table demonstrating its global presence.

In Financing and Solutions et cetera, revenue rose in DCM in response to an increase in the value of domestic corporate bonds issued, and fell in ECM partly owing to seasonal factors.

Next, please turn to Page 13 for Banking division, which became an independent division in April. In Banking, net revenue was JPY 12.8 billion, a rise of 12% and income before income taxes was JPY 3.6 billion, an increase of 19%. KPIs such as loan outstanding and Investment Trust balance stayed buoyant, as you can see, and the income from lending activities and trust and agent services held firm.

In May, work to upgrade Nomura Trust and Banking's core banking system was completed and the preparations for the adoption of sweep accounts in next fiscal year have been going smoothly.

Next, Page 14. Group-wide expenses were JPY 363.0 billion, a 2% increase from the previous quarter. Compensation and benefits were JPY 186.3 billion, rising 8%, reflecting an increase in performance-linked bonus provisions. Information processing and communications expenses were JPY 57.2 billion, a decline of 5%, mainly attributable to yen appreciation and also owing to factors including the dropping out of onetime expenses recognized in the previous quarter.

As an additional detail, other expenses came to JPY 51.8 billion, nearly the same amount that was recognized in the previous quarter. This includes JPY 6.6 billion related to compensation for losses arising from illegal trades in client accounts due to phishing scams and JPY 2.7 billion related to the acquisition and the integration of the U.S. Asset Management business of Macquarie Group. Other expenses look the same as the previous quarter because professional fees and other transaction-related expenses declined.

Finally, financial position, Page 15. In the table on the bottom left, you can see that Tier 1 capital was about JPY 3.4 trillion, down about JPY 100 billion from end of March and risk assets were about JPY 22.9 trillion, an increase of about JPY 1.4 trillion with the result that the common equity Tier 1 ratio was 13.2% at the end of June within the 11% to 14% target range we introduced at the Investor Day in May.

This ratio is down from 14.5% at the end of March, attributable to an increase in risk assets arising in the course of normal business activities in the agreement to acquire all equity of the U.S. asset management business of Macquarie Group factors that had the effect of depressing the ratio by about 0.8%. After the closing of the acquisition, the method of calculating the regulatory capital ratio will change and the effect of the acquisition of the ratio will change.

This concludes our overview of our first quarter results. I would like to close with some final remarks. The first quarter got off to an uncertain start as the U.S. introduced its tariff policy in early April and various events pointed to heightened geopolitical risk. Under such circumstances, we think our business got off to a steady start with revenue and profit rising quarter-on-quarter in every division.

In the first quarter, EPS was JPY 34.04 and ROE was 12.0%, which are the highest, respectively, since the first quarter and the third quarter of fiscal year 2020 and 2021. On this basis, we have attained the quantitative target announced last year for 2030 of consistently achieving ROE of 8% to 10% or more for 5 straight quarters.

The Nikkei Stock Average has been above the JPY 40,000 level recently, gradually making up for ground lost when it declined in April this year. Net revenue in Wealth Management -- in Japan -- Nikkei Stock Average has been above the JPY 40,000 level recently, gradually making up for ground lost when it declined in April this year.

Net revenue in Wealth Management thus far in July has been slightly above the first quarter. Since mid-June, client sentiment has gradually improved in tandem with an easing of market uncertainty, lifting the volume of business involving stocks and investment trusts. In July, recurring revenue has been rising in response to a recovery in market prices with inflows of recurring revenue assets continuing to exceed outflows. We think wealth management will be able to shine precisely because of the changing conditions, and we look forward to continuing the conversation with our clients.

In Wholesale, equity products have been doing well in Global Markets business. Corporate actions aimed at improving capital efficiency and growth, particularly in Japan remained at the high level in investment banking. In July thus far, net revenue in wholesale has been tracking in line with the level in the first quarter and continues to be solid. We would like to provide some more context on the issue of illegal trading in clients' accounts, resulting from phishing scams. In response to instances of illegal trading, we raised the security level in stages and the number and scale of damages have come down from the peak.

Our plan now is to accelerate the implementation of more sophisticated security measures and roll out passkey authentication system that uses more secure biometric authentication sometime this fall, but we should mention here that even our existing security protocols have been examined by external parties and have been judged be up to spec with industry standards. We have been in direct contacts with almost all clients that have been affected by the attacks. We plan to deal with the situation thoroughly in consultation with them. We plan to monetize business opportunities while continuing to pay close attention to our risk thresholds and cost controls. We ask for your continued support.

[Operator]

[Operator Instructions] The first question is by Watanabe-san of Daiwa Securities.

[Kazuki Watanabe, analyst]

Watanabe of Daiwa Securities. I have 2 questions. First of all, phishing scam and the compensation for losses, Q1, JPY 6.6 billion. But up to end of June, all of the illegal transactions have been reflected. And I think your policy is to bring back the position of the clients back. Is it going to be expanded? Is it going to be reflected in your credit cost?

And then on Page 11, if you look at the current growth, FIC was weak while equity was strong. Other than ForEx, what's the backdrop to FIC and equity trends? And also, if you have monthly trends for FIC and equity, we would also appreciate such information.

[Hiroyuki Moriuchi, executive]

Watanabe-san, thank you for the question. First of all, on the phishing scam and the compensation, whether the cost reflects the transactions up to end of June. Up to 28th of June, on the assumption of restoring their positions, we estimated the cost counting the trades up to 28th of June. So I think it's safe to say that all of the illegal trades up to the end of June had been reflected. And also, where will this expense appear on which line? Other expenses, it's included in the line of other expenses. I hope I answered your first question.

[Kazuki Watanabe, analyst]

Yes.

[Hiroyuki Moriuchi, executive]

Then this is the CFO speaking. In comparison to peers, excluding ForEx, equity, strong fixed income rather weak, that was your impression. And regarding fixed income, as you rightly pointed out, if we exclude strong yen, then in comparison to the American peers, I think we've been able to catch up to a certain extent. However, we may appear to be slightly weak because of the confusion of the April market. The Japanese rates product was rather lagging and that had caused some impact.

Japan's rates, after May, we have been able to capture customer flow. However, due to the lag in April, that had reflected -- been reflected in our performance. And Japan credit, SPPC securitization, slightly up. There was bouncing back from that strongness.

And also the monthly trend at the global level, fixed income in April, there was a slight strength, 30% in the mid-30s, but May, June, more or less the same. So Japan was rather weak, but outside of Japan, there was some strength.

And on the equity side, in April, there was confusion. And that increased volatility and trade, we have been successfully been able to do risk management. So as far as equity is concerned, slightly -- or close to 40% revenue was gained for equity. So April was strong. So that's where we are today. I hope I answered your question.

[Kazuki Watanabe, analyst]

And can I also confirm the reasons behind the strength in equity?

[Hiroyuki Moriuchi, executive]

Equity. This is the CFO speaking. Equity. Yes, our performance was strong, especially the Americas customer flows led to U.S. derivatives performance being significantly strong.

[Operator]

Next person asking a question is Ms. Tsujino of BofA Securities.

[Natsumu Tsujino, analyst]

Regarding global markets, in July, what is the situation that you could -- is there any particular situation you can talk about so compared to the other period? During that term for Japan and also for overseas, could you add some color of GM situation? And secondly, about technical details, for each region, EMEA is in the red ink. But looking at the GM geographies, FIC in Europe increased in profit. But why is this situation?

[Hiroyuki Moriuchi, executive]

Thank you, Tsujino-san, for your questions. Firstly, your first question. Situation after or in and after July, any comment from our end? Overall, in GM, the business is not so bad. And especially equity is strong and fixed income is relatively weak. But overall, performance is in line with the first quarter level. And also, could you give me a moment to address your second question.

For Japan and overseas. Situation of Japan business in Japan is not weak, but overseas business is stronger than the business in Japan. That's our impression.

[Natsumu Tsujino, analyst]

Are you talking about both equities and FIC?

[Hiroyuki Moriuchi, executive]

In Japan, fixed income is weaker than equities and equities are stronger, and for each region. In the U.S.A., in Americas, recently, we see a solid performance. In EMEA, the business is in line with our assumptions. And in AEJ, there is some slowness but it's within the assumed level or assumed range.

And your second question. So the reason why the weakness -- the reason for the weakness in EMEA, why was loss incurred? That's because due to market factors, laser business was weak. So that was the reason. Also, in EMEA, when we look at the cost, personnel cost due to the compensation regulation in Europe, in the first quarter, the cost that had to be recognized in the first quarter was inflated because of the regulatory impact. So those are the 2 factors that explain the slowness in EMEA other than them, the remainder is accumulation of smaller items.

[Natsumu Tsujino, analyst]

I couldn't catch what you said regarding -- what you said about the market, I couldn't catch what you said. Could you repeat?

[Hiroyuki Moriuchi, executive]

I said laser digital. We have a digital asset business, and that was affected by the market conditions and the performance there was not so strong.

[Natsumu Tsujino, analyst]

Okay. I understand. Was it so weak?

[Hiroyuki Moriuchi, executive]

But the market was recovering if I recall, April through June. Market was weak in January through March, generally speaking, regarding crypto asset. And flow aside from Japan, flow overseas in the April through June quarter flow was -- there was a sufficient flow in my understanding. Not only the Bitcoin but we hold various currencies, and we also conduct venture start-up type investing as well. So we received -- we were affected on multiple fronts.

[Operator]

The next question is by Muraki-san of SMBC Nikko Securities.

[Masao Muraki, analyst]

Muraki of SMBC Nikko. On capital policy and M&A, I have a few points I wish to ask. Page 15, capital policy. You're the new CFO, Moriuchi-san. I want to confirm with you your basic policy. Here, hierarchy of capital policy. What's the priority? What's at the helm of capital policy? And also Q2 share buyback, CET1 ratio, Macquarie closing on the debt assumption, 12.5% probably a pro forma basis, but target range, that would be the midpoint of the target range. What's the probability of risk taking? And what do you think about the level? Is it high, low?

And regarding Macquarie, December end was the original target date for closure. Has there been an update? And also intangibles, amortization and contribution to profits, if you have any updates on those points, I would also appreciate.

[Hiroyuki Moriuchi, executive]

This is Moriuchi speaking. Thank you for your questions. First question was on capital policy. And what is our priority in capital policy? That is how I interpreted your question. First of all, it's about business strategy. Going forward in our business strategy, investment, what's the expected investment? And what are the specific opportunities? And what are the strategies to capture those opportunities? Those are the points we need to think first.

And in such strategy, if we are not able to find many investment opportunities, then we will tilt towards returning benefits to the shareholders. But if we think that there are many opportunities, we've committed to more than 50% return of benefit to shareholders. So that's taken into consideration, we will try to strike the ideal balance.

A related point. 12.5%, it's the midpoint of the range between 11% to 14%. What's our evaluation of the level? In terms of capital, capital will become slightly thin. So it's probably thinning the capital rather than being at the midpoint. CET1, the lower bound, 11%. It's difficult from the capital soundness perspective.

So especially regarding wholesale, this will be the limit as you try to capture business opportunities. We say that and that versus usage, there could be some buffer, but taking into consideration the possibility of that buffer becoming tight, then it may be on the lower side.

[Masao Muraki, analyst]

So is it too low so much so that it would be difficult to reach and benefits to the shareholders?

[Hiroyuki Moriuchi, executive]

No, not that level, but it may be slightly lower than the midpoint.

And again, this is the CFO speaking. Regarding Macquarie, do we have some updates? The original plan was to close by end of December. At the moment, each country's regulatory authorities are being approached and were in the filing process towards closing. And also by them coming into our group, there would have to be some linkage with the functions like IT and also they have to be booked into our accounting system. So consolidation system has to be worked out. And we are currently conducting discussions with our counterparties. And these consultations are proceeding extremely smoothly. So at this stage, are there any critical issues that would hinder closing? No. For the time being, there appears to be no such issues. And regarding profit contribution, intangibles, there's the NDA that we have signed. So until closing, it's difficult for us to comment further on the level. Thank you.

[Masao Muraki, analyst]

This is Muraki speaking. On the first point is you want to increase CET1. In other words, you want to raise it to the higher level of the range, but risk asset, Macquarie Asset Management. Credit risk increased due to the agreement you reached. Market risk has increased, but considering your current market operations, RWA, market operations RWA is about to increase in June, do you think that there has been increase in this quarter? What do you think about the trend in risk-weighted assets?

[Hiroyuki Moriuchi, executive]

Thank you for the question. This is the CFO speaking. Why is RWA increasing in the market? One, the current business -- in the current business, exposure is increasing in some areas, and that's being reflected in Global Markets and in investment banking, especially the global markets. But pipeline and activity and opportunities have become quite visible. So within our company, we are struggling to do the management of financial resources. But there is high performance and RWA may increase, but it's increased to a certain level, so we may have to manage more stringently.

[Operator]

The next question comes from JPMorgan Securities, Sato-san.

[Koki Sato, analyst]

I am Sato from JPMorgan Securities. It's a simple confirmation. Firstly, in the first quarter, you had the special factors related to the JPY 2.7 billion related to acquisition of Macquarie business and the compensation for the damage, JPY 6.6 billion. So what is -- how are you reflecting these factors into different segments?

And second point is regarding investment management, especially ETF outflow, JPY 670 billion. So has the situation already settled by the end of June?

[Hiroyuki Moriuchi, executive]

Thank you for your questions. Regarding special factors, where in the segment, we are booking them. As for sale of Takanawa facilities, it's in others -- in segment Others. And as for Macquarie and phishing compensation, they are in the headquarters or corporate account.

And your second question regarding outflow of ETF funds, by the end of June, the situation has settled down. In the first quarter, we had ETF outflow and our speculation is that it's due to the activities of certain investors, which led to outflow. So excluding the activities of specific investors, the situation would have been stable.

[Koki Sato, analyst]

Then Page 8 of the material investment management cost. The cost -- on a Y-o-Y basis or a Q-on-Q basis, cost has slightly gone up. Is it -- if the increase is not due to special factors, what's the reason for the cost increase?

[Hiroyuki Moriuchi, executive]

Regarding Y-o-Y, the personnel cost increased and the performance-linked bonus increased for one thing. Also Nomura Capital Partners investment performance linked compensation increased somewhat. That's another reason.

[Operator]

The next question is by Morgan Stanley MUFG Securities, Nagasaka-san.

[Mia Nagasaka, analyst]

Nagasaka, Morgan Stanley MUFG Securities. On client sentiment, I have 2 questions on Investment Banking division and Wealth Management division. Regarding Investment Banking, if we look at the results of American banks, in the April-June quarter, they are -- have drawn bright pictures regarding the guidance and engagement with clients is becoming more active. Those are some of the comments issued by American banks.

Regarding Nomura, are you seeing recovery of corporate sentiments and more engagement with corporate customers? You said that the pipeline is full, which we understand. But including the outlook, what do you think about the posture of the corporate sector? Have you seen change? Or any other uniqueness in Japan? Can we still expect a stable deal completion in the Japanese market?

Next on Wealth Management, the recurring assets, net increase since July, but do you think that the customer behavior has changed when the market is down or even in the midst of uncertainties, do you think that the investment appetite has remained strong? Have you felt any changes in the client posture?

[Hiroyuki Moriuchi, executive]

This is the CFO speaking. Thank you for your questions. The first question regarding the client sentiment and especially on Investment Banking. First, if we compare Japan and overseas, regarding Japan, there are slightly different behaviors in comparison to other markets, we feel so in the past couple of years. On continuous basis, the demand seems to have been quite high regarding activities.

Corporate Governance Code, Stewardship Code was adopted a few years ago and close to 10 years have passed. And in the recent 1 or 2 years, we have seen quite strong enthusiasm amongst the corporate sector. In other words, they think that they need to take action. So this may be unique to Japan, different from overseas markets.

And on the other hand, regarding overseas market, after the Trump tariff news, there had been some delays to deals, and we were no exception. But that kind of delay has become stabilized. So we can't -- it may be correct to say that the sentiment is improving. But in terms of pipeline increasing, I think the signs are brighter.

And in the Wealth Management division. Regarding Wealth Management in April, there was a market shock. And there were some clients who took the wait-and-see attitude. But in April, May and June, flow revenues were sound. But because the shock was quite significant, to a certain extent, clients took the sidelines. But it didn't go as far as going into panic status. So in that sense, investors remain calm and literacy amongst the clients has improved. And we are expecting that they will become even mature as investors.

[Operator]

[Operator Instructions] The next person asking the question is SBI Securities, Otsuka-san.

[Wataru Otsuka, analyst]

I'm Otsuka from SBI Securities. Can you hear me?

[Hiroyuki Moriuchi, executive]

Yes.

[Wataru Otsuka, analyst]

This is Otsuka. I have 2 questions. First, regarding phishing scam. JPY 6.6 billion, that's the number you've talked about. But according to media report, online securities and the face-to-face securities firms, their responses are different. Online security firms, they made compensation to cover 50% of loss mostly. But in your case, is it 1 -- some media reports said 100% of damage will be compensated for by Nomura, but what is your approach?

[Hiroyuki Moriuchi, executive]

Online security firms, well, they make financial compensation to cover 50% of loss or damage. In our case, our approach is restitution. That's different from 100% financial compensation. In other words, before the damage on our clients, our approach is to bring everything back to the situation before the damage. So the restitution is our approach. So that's different from online brokers approaches.

[Wataru Otsuka, analyst]

Okay. So it's not monetary compensation that you are making?

[Hiroyuki Moriuchi, executive]

Yes, exactly. So our basic approach is restitution bringing the situation back to the previous state. And of course, regarding the damage suffered by clients and depending on the specific situations, it is not that we apply the same restitution approach all the time. So it is possible that on a case-by-case basis, we consider the monetary compensation. But the basic stance or approach is to restore the situation back to the previous state.

[Wataru Otsuka, analyst]

My second question is about the policy holding sale and your revenue. So there is -- I do not find carved out numbers, so it may be difficult for you to answer about global markets, equity, execution and investment banking, those are the areas where we see the numbers. But Nomura Securities stand-alone numbers such as trading securities and the underwriting of securities. In the first quarter, there seems to be a slowdown from last year. Is it the right understanding? That's my second question.

[Hiroyuki Moriuchi, executive]

Thank you for your question. Regarding the sale of policy holdings. As you say, global markets sale of securities through a block trade or that kind of opportunity or the offering by investment banking, such as EBB. So that kind of ECM on transactions will be another approach. But as you say, the last year or 2, we have had a high level of activities related to policy holdings of shares. But pace of activity is slowing down even though our activities will not come down to 0, but we expect normalization of pace of our policy holding related activities.

[Wataru Otsuka, analyst]

Okay. Then in investment banking, you have mentioned pipelines and deals. If anything, you are referring to the advisory side of business?

[Hiroyuki Moriuchi, executive]

Yes. Moriuchi speaking. In IB, we foresee pipeline in IB in the area of M&A advisory. For DCM, we have a certain level of strength. On the other hand, for ECM this year, last year's activity was at quite high levels. So we see slowness with ECM this year.

[Operator]

[Operator Instructions] As there is no more question, we'd like to conclude question-and-answer session. Now we'd like to make closing address by Nomura Holdings.

[Hiroyuki Moriuchi, executive]

Thank you very much for joining us. This was the first session for me to speak to the analysts. In future quarterly results announcements and in various other activities, we will be depending on your great support. We will be working hard. I will be working hard. So I solicit your continued support. Thank you very much.

[Operator]

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

[Statements in English on this transcript were spoken by an interpreter present on the live call.]