Daiwa Securities Group (8601) Q3 2026 earnings summary

Executive summary

• Net operating revenues for Q3 FY2025 reached JPY 194.6 billion, up 12.8% sequentially, marking a record high for the third quarter.

• Net income for 3Q FY2025 reached its highest level in 12 years, despite a YoY decline in ordinary income due to the absence of prior year negative goodwill gains.

• Annualized ROE stood at 11%, reflecting balanced growth in both stable and flow revenues.

• Base income, a key indicator of stable earnings, rose 28.2% YoY to JPY 128.3 billion, on track to surpass the medium-term plan target.

• Operating revenue for the nine months ended December 31, 2025, rose 4.8% year-over-year to JPY 1,075.6 billion.

Financial highlights

• Net operating revenues for 1Q-3Q FY2025 were JPY 522.5 billion, up 10.8% YoY; ordinary income was JPY 167.4 billion, down 3.6% YoY; net income attributable to owners was JPY 125.4 billion, up 0.8% YoY.

• Commission received totaled JPY 128.5 billion in Q3, up 8.7% quarter-on-quarter, and reached JPY 347.2 billion for 1Q-3Q, up 15.1% YoY.

• Selling, general, and administrative expenses were JPY 132.8 billion in Q3, up 8.2%, and JPY 374.7 billion for 1Q-3Q, up 4.7%.

• EPS for 3Q FY2025 was JPY 33.66; diluted net income per share for 1Q-3Q was JPY 88.80.

• Extraordinary income surged to JPY 25.5 billion, mainly from gains on sale of non-current assets.

Outlook and guidance

• Strong Q3 momentum in Wealth Management is continuing into Q4.

• Cumulative base income is on track to exceed the medium-term management plan's final-year target of JPY 150.0 billion.

• Dividend payout ratio remains at 50%, with JPY 44 as the minimum dividend level through FY2027.

• Share buybacks will be considered based on full-year performance and financial soundness.

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