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Nomura on Wednesday reported a 76% fall in January-March net profit, joining Wall Street investment banks in reporting a slump in dealmaking fees as global mergers and acquisitions activity shrank to the lowest level in more than a decade in the last quarter.
Investors have grown more cautious about volatile markets as a banking crisis that began with the collapse of Silicon Valley Bank spread to Europe with the sale of Credit Suisse Group AG to its Swiss rival UBS Group AG (SIX:UBSG).
Moody’s (NYSE:MCO) Japan senior analyst Tomoya Suzuki also blamed rapidly rising interest rates around the world and geopolitical tensions for dampened investor sentiment.
“Moody’s has a negative outlook on Nomura Holdings’ rating, reflecting structural challenges to the company’s profitability in the domestic retail segment,” Suzuki wrong in a report.
Nomura’s wholesale division, which houses its investment banking and trading businesses, sank into the red for the second consecutive quarter with a pre-tax loss of 14.2 billion yen ($106.24 million). Costs also ballooned at the division due to global inflation and a weaker yen.
Its shares were down 7.5% in early trade, marking the biggest daily fall since March 2021.
($1 = 133.6600 yen)
