Daiwa Securities Group (8601) Q1 2027 earnings summary

Executive summary

• Achieved strong revenue and profit growth across all business segments in Q1 FY2026, with net operating revenue up 42.0% year-over-year to JPY 220.3 billion and ordinary income up 101.5% to JPY 88.1 billion, despite market uncertainty.

• ROE reached 12.7%, reflecting improved profitability and operational efficiency.

• Profit attributable to owners increased 80.6% year-over-year to JPY 56.4 billion.

• Completed full acquisition of ORIX Bank, with earnings consolidation to begin from 2Q FY2026.

• Record-high asset-based revenue and continued net asset inflows in Wealth Management.

Financial highlights

• Commission received totaled JPY 143.4 billion, up 42.9% year-over-year, with brokerage commission up 65.3% and underwriting commission up 91.8%.

• Net trading income increased 48.9% to JPY 33.2 billion; net financial income rose 23.9% to JPY 24.5 billion.

• SG&A expenses rose 20.0% year-over-year to JPY 142.9 billion, driven by higher trading and personnel costs.

• Overseas ordinary income reached a record high, especially in Americas and Asia/Oceania.

• EPS was JPY 40.68; BPS was JPY 1,294.66.

Outlook and guidance

• Progressing ahead of schedule on medium-term management plan targets, with base income for Q1 FY2026 at JPY 62.8 billion, well ahead of the JPY 150.0 billion mid-term plan target.

• Management expects continued growth in stable earnings, supported by strong asset inflows and robust client activity.

• No earnings forecasts disclosed for the fiscal year ending March 31, 2027 due to market uncertainties.

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

• Fiscal year positioned as a year to drive achievements further; Q1 marks a strong start.