Daiwa Securities Group (8601) Q2 2025 earnings summary

Executive summary

• Net operating revenues for 1H FY2024 reached ¥310.2 billion, up 11.4% year-over-year, with ordinary income at ¥110.6 billion, the highest since FY2000.

• Profit attributable to owners of parent rose 45.4% YoY to ¥77.8 billion for 1H FY2024; EPS for 2Q FY2024 was ¥38.18 and for 1H FY2024 was ¥84.94.

• Interim dividend set at a record ¥28 per share, with a payout ratio of 50.6% and a minimum full-year dividend policy of ¥44 per share from FY2024 to FY2026.

• 2Q FY2024 ordinary income surged 93.1% QoQ to ¥72.9 billion, the highest since 4Q FY2005.

• Comprehensive income declined 50.1% YoY to ¥66.9 billion, mainly due to negative other comprehensive income items.

Financial highlights

• Commission received was ¥98.3 billion, up 5.3% sequentially; brokerage commissions fell 8.5% to ¥21.1 billion.

• Underwriting commissions rose 29.9% to ¥10.9 billion; M&A-related commissions up 37.6% to ¥11.8 billion.

• SG&A expenses increased 4.7% to ¥119.4 billion.

• Overseas ordinary income was ¥4.6 billion, up 103.6% QoQ, with improvements in Europe, Asia, and the Americas.

• Net trading income increased to ¥56.2 billion from ¥44.7 billion year-over-year.

Outlook and guidance

• October started strong, with wealth management and equity income rebounding to previous quarter levels.

• M&A pipeline for Q3 and Q4 is robust, with expected 10–20% increase in deal value year-over-year.

• Real estate and alternative asset management projects are progressing well for the second half.

• Management targets a stable business structure less affected by external factors, focusing on expanding base income and asset-based revenues.

• No earnings forecast disclosed for FY2025 due to market uncertainties; dividend policy targets a payout ratio of 50% or more, with a minimum annual dividend of ¥44 per share through FY2027.