Daiwa Securities Group (8601) investor relations material

Executive summary

• Net operating revenues for Q1 FY2025 were ¥155.2 billion, up 4.1% year-over-year, with ordinary income at ¥43.7 billion, up 15.8% year-over-year; profit attributable to owners rose 30.2% to ¥31.2 billion.

• Base income, a key stable earnings indicator, increased 10.3% year-over-year to ¥34.1 billion.

• Wealth Management and Asset Management divisions delivered record-high assets under management and stable results.

• Market volatility from tariff policy, interest rate fluctuations, and early April stock plunge impacted results, but core profitability was resilient.

• Comprehensive income declined 45.5% year-over-year to ¥33.1 billion, mainly due to negative foreign currency translation adjustments.

Financial highlights

• Commissions received were ¥100.3 billion, with brokerage commissions down 8.2% and underwriting/secondary offering commissions down 41.6%.

• SG&A expenses were ¥119 billion, up 4.4% year-over-year, with lower trading and personnel expenses due to reduced bonuses.

• Net trading income dropped 18.9% to ¥22.3 billion, while net financial income rose 7.4% to ¥19.7 billion.

• EPS for the quarter was ¥22.20, up from ¥17.10 a year earlier.

• Extraordinary profit from disposal of strategic equity holdings and a lower effective tax rate contributed to net profit.

Outlook and guidance

• Management expects continued stable base profit and aims to enhance asset-based revenues through total asset consulting and expanding wrap account services.

• Dividend policy targets a payout ratio of 50% or more, with a minimum annual dividend of ¥44 per share through FY2027.

• No earnings forecasts disclosed for the fiscal year ending March 31, 2026, due to market uncertainty.

• Deposit acquisition competition is expected to intensify, with campaigns planned to secure more stable funding.

• July saw a recovery in global markets and wealth management product purchases, with revenue levels returning to Q4 highs.