Daiwa Securities Group (8601) Q2 2026 earnings summary

Executive summary

• Net operating revenues for Q2 FY2025 rose 11.2% sequentially to JPY 172.6 billion, with ordinary income up 24% to JPY 54.1 billion, driven by strong performance in stock-related assets and floor revenues.

• Net income attributable to owners increased 52.8% QoQ to JPY 47.7 billion, with annualized ROE at 11.6%. Interim dividend reached a record JPY 29, with a payout ratio of 51.4%.

• Profit attributable to owners of parent for 1H FY2025 reached a 12-year high, despite a YoY decline in ordinary income due to the absence of prior year negative goodwill gains.

• Wealth Management Division achieved its highest ordinary income since Q3 FY2013, supported by robust asset consulting and favorable equity markets.

• Asset Management saw continued AUM growth, though Alternative Asset Management posted a loss due to impairments in renewable energy investments.

Financial highlights

• Commission received totaled JPY 118.3 billion in Q2, up 17.8% sequentially; brokerage commission rose 27.5% to JPY 26.9 billion, underwriting commission up 21.7% to JPY 10.8 billion, and distribution commission up 31.8% to JPY 6.2 billion.

• M&A-related fees increased 23.5% to JPY 13.8 billion.

• SG&A expenses rose 3.1% to JPY 122.7 billion, mainly due to higher trading and personnel costs.

• Overseas ordinary income nearly doubled to JPY 7.6 billion, with improved profitability in Europe and the Americas.

• Asset under custody surpassed JPY 100 trillion, a record high.

Outlook and guidance

• Base profit for H1 reached JPY 78.1 billion, annualizing above the JPY 150 billion midterm plan target.

• Management expects to achieve midterm plan profit targets one year ahead if current trends continue.

• Wealth management and market activity remain strong into Q3, with continued high client flows and robust pipeline in investment banking.

• No further significant impairment losses expected in alternative assets, but ongoing monitoring will continue.

• No earnings forecasts disclosed for FY2026 due to market uncertainties.