Nomura Asia Equity Forum 2011 Nomura Holdings, Inc. June 2011 K - PDF document

Nomura Asia Equity Forum 2011 Nomura Holdings, Inc. June 2011

K Kenichi Watanabe i hi W t b 1. Review of last fiscal year President & CEO 2. Addressing strategic issues 3. Corporate governance Monetizing our Momentum Monetizing our Momentum Philip Lynch Philip Lynch 4. Nomura Asia ex-Japan Regional CEO, Asia ex-Japan 2

T Two full years of profitability f ll f fit bilit FY2008/09 FY2009/10 FY2010/11 FY2011/12 ~ � Expand client � Further monetization of World-class franchise investments independent � Monetize � Profitable international franchise investments investments � � Stable growth in revenues by Stable growth in revenues by investment bank i t t b k � Increase global expanding client assets in Retail presence and Asset Management � More stringent control of costs � I Improve ROE ROE Sovereign debt crisis � in Europe in Europe Changes to regulatory � environment Return Return Establish Establish E h Enhance profitability fi bili Loss to profit foundation 3

FY2010/11 E t bli h f FY2010/11: Establish foundation (1) d ti (1) Expand client franchise Monetize investments Global Markets client revenues Wholesale net revenues from Americas 1 (Indexed, FY2009/10 1Q = 100) (Indexed, FY2009/10 1H = 100) 806 169 163 155 145 145 144 144 123 442 117 366 100 100 FY2009/10 FY2009/10 FY2010/11 FY2010/11 FY2009/10 FY2009/10 FY2010/11 FY2010/11 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1H 2H 1H 2H 4 Note: 1. Excludes Instinet

FY2010/11 E t bli h f FY2010/11: Establish foundation (2) d ti (2) Increase global presence Diversified revenue sources through disciplined expansion of product mix and coverage markets Large international deals International Power / GDF S GDF Suez (M&A) (M&A) M&A multi-product £15.8bn High yield bonds deals 1 Santander / BZWBK (M&A) Central China Real Estate Permira / Findus Italy €4.1bn US$300m €805m / €575m Unitas Capital / Hyva DJO €525m / US$725m US$300m ECM products US Prudential / AIG Star & AIG BBVA Rights Issue Edison (M&A) €5.1bn US$4.8bn Rank Group / UCI Nordea ABB (M&A + Finance) US$3bn US$980m / US$700m US$980m / US$700m Japan China Chongqing Rural Otsuka HD IPO Commercial Bank IPO JPY198.4bn US$1.7bn China Unicom CB China Unicom CB INPEX Follow on INPEX Follow-on US$1.84bn JPY542.2bn 5 (1) M&A deal size (left) + Financing deal size (right).

K Kenichi Watanabe i hi W t b 1. Review of last fiscal year President & CEO 2. Addressing strategic issues 3. Corporate governance Monetizing our Momentum Monetizing our Momentum Philip Lynch Philip Lynch 4. Nomura Asia ex-Japan Regional CEO, Asia ex-Japan 6

St Strategic issues t i i � Monetize international franchise, ensure consistent =>Page 8 profits � Expand client assets in Retail and Asset =>Page 11 Management to achieve stable growth in revenues g g � Implement more stringent control of costs Implement more stringent control of costs =>Page 14 Page 14 Enhance profitability 7

Wholesale: Monetize international franchise, ensure consistent Wholesale: Monetize international franchise, ensure consistent profits International revenue contribution International strategies Re-energize and monetize EMEA Equities International Japan Derivatives as core competency � Grow Cash and other businesses selectively � EMEA Rates to become the single largest business in FI Expand on Structured Credit success 20-30% Growth in IB driven by M&A, financing 34% 60%+ growth in budgeted revenues (ex-Instinet) Fixed Income leading with Securitized Products, Rates Fixed Income leading with Securitized Products Rates Increasing contribution from Credit and FX Reap dividends from 2010/11 investments in Equities Americas Momentum in Flow Derivatives � Maintain Cash aligned with IB and trading capabilities � 70-80% international i t ti l IB emphasis on financing / solutions and M&A More focused build and cross-divisional alignment diversification 66% Grow revenues by monetizing existing platform Execution services, ECM, FX, Rates, distribution Execution services ECM FX Rates distribution � � Driving client strategy and productivity � AEJ Increase contribution from higher-margin products Structuring, private financing, derivatives solutions � FY2010/11 Target Deepen penetration of key local markets International profitability a key objective 8

Wh l Wholesale: Market share growth in Japan since 2008 l M k t h th i J i 2008 Equities Fixed Income Client revenues related to flow derivatives with Japanese Cli t l t d t fl d i ti ith J Market share on Tokyo Stock Exchange 1 institutional investors Indexed as FY2008/09 = 100 13.7% 252 +2.3x +2.5x 5.9% 100 FY2009.3 FY2011.3 Apr-08 Apr-11 9 Note: 1. Based on Nomura

Wh l Wholesale: Maintaining dominant market share in Japan l M i t i i d i t k t h i J Japan related M&A, ECM, DCM League Tables 3 (FY2010/11) Financial Advisor / Bookrunner Rank Value Share (%) # Deals 1 Nomura $64 bn $ 51.8 116 M&A 1 2 JP Morgan $37 bn 29.9 17 3 MUFJ Morgan Stanley $31 bn 25.6 64 1 Nomura $21 bn 44.3 54 ECM 2 Goldman Sachs $5 bn 9.6 5 3 Daiwa $5 bn 9.6 26 1 Nomura ¥2.3 tr 24.2 112 DCM 2 2 Mizuho ¥1.9 tr 20.3 117 3 Daiwa ¥1.6 tr 17.5 92 Note: 1. Excludes real estate transactions 2. All corporate debt (excludes Government, Agencies, Government Sponsored Enterprises), includes self-led issues 3. Source: M&A & ECM league tables per Thomson Reuters, DCM league table per Thomson DealWatch 10

R t il St bl Retail: Stable growth in revenues by expanding client assets th i b di li t t Retail client assets Key initiatives Key initiatives (trillions of yen) Take a consulting-based approach to deliver financial services tailored to the needs of retail investors 100 Six strategies � Focus on segments, establish consulting services F t t bli h lti i 70.6 � Collaboration between branch offices, online services, and call centers to expand client franchise � Focus on client convenience, regional marketing strategies � Expand product and service lineup � Expand product and service lineup � Strengthen comprehensive training program in recruiting and ongoing development � Enhance efficiency of IT platform Mar-11 Target 11

Asset Management: Stable growth in revenues by expanding Asset Management: Stable growth in revenues by expanding assets Assets under management Key initiatives Key initiatives Mutual fund business (trillions of yen) � Deliver products that meet diverse client needs through a broad range of channels such as securities firms (incl. 30 online brokers), banks, Japan Post Bank/Japan Post, and DC pension funds 24.7 Investment advisory business � Products matched to client needs D li titi ti t l b l � Deliver competitive active management on a global basis � Pension funds and other institutional investors in Europe and US � Government institutions in Middle East and Asia � Islamic regions (Sharia compliant products) � Islamic regions (Sharia-compliant products) Mar-11 Target Improve investment performance 12

Asset Management: Further strengthen management and Asset Management: Further strengthen management and research capabilities for Asian equities Offer Asia-focused products to clients globally AuM in Asian equities 2 Enhancing capabilities in Asia � Entered Asia in1988, over 20 years of asset management (trillions of yen) Headcount 1 : 100 experience in the region (As of Mar 2011) � Focused on expanding capabilities in Asia from 2006 to 2008 � Focused on expanding capabilities in Asia from 2006 to 2008 � Building local research platform centered on Asian equity asset management hub in Singapore Seoul (2005~ Seoul representative office) 1988 1988~ Shanghai Nomura Asset Management Hong (Plan to establish research office) Kong Research/management of Chinese and Hong Kong equities 2006~ Nomura Asset Management Malaysia N A t M t M l i Hong Kong Research/management of Malaysian equities Mumbai 2008~ Nomura Islamic Asset Management N I l i A M Sharia-compliant products Kuala Lumpur 2011~ Singapore 1988~ 1988 LIC Nomura Mutual Fund Asset Nomura Asset Management Singapore Management Control tower for managing Asian equities Indian equity research 13 1. Excludes LIC Nomura Mutual Fund Asset Management headcount. 2. Excluding Japanese equities

I Implement more stringent control of costs l t t i t t l f t Expense to net revenue ratio Initiatives Contain cost increases relative to revenue growth Personnel expenses 350% 150% 150% 350% 350% Shift to variable compensation Compensation system that reflects revenues and resource use Recruitment plan taking into account business environment, business priorities, and cost effectiveness 100% 92% 92% Non-personnel expenses 80% 91% Stringent cost control � Ri � Rigorous budget planning and control b d t l i d t l process 50% Detailed evaluation of new investment areas FY08/09 FY08/09 FY09/10 FY09/10 FY10/11 FY10/11 T Target t Efficient, strategic IT investment 14