Net revenue
increased by 7% from ¥1,403,197 million for the year ended
March 31, 2017 to ¥1,496,969 million for the year ended March 31, 2018. This increase is primarily driven by higher contribution from
Commissions
and
Asset management and portfolio service fees
in Retail and Asset
Management.
Commissions
increased by 14% from ¥327,129 million for the year ended March 31, 2017 to ¥373,313 million for the year ended March 31, 2018 primarily due to an increase in commissions received from the
distribution of investment trusts and brokerage commissions received from equity and equity-related products.
Fees from investment banking
increased by 10% from ¥92,580 million for the year ended March 31, 2017 to
¥101,663 million for the year ended March 31, 2018 primarily due to increase in revenue from M&A and our solution business associated with fund raising.
Asset management and portfolio service fees
increased by 13% from
¥216,479 million for the year ended March 31, 2017 to ¥245,616 million for the year ended March 31, 2018 primarily due to an increase in assets under management driven by positive net inflows into ETFs and investment
trusts for discretionary investments.
Net gain on trading
decreased by 7% from ¥475,587 million for the year ended March 31, 2017 to ¥442,885 million for the year ended March 31, 2018, primarily driven by slower
performance in our Fixed Income business and losses recognized in connection with a specific margin loan transaction.
Net gain on trading
also included total losses of ¥0.5 billion attributable to changes in Nomuras own
creditworthiness with respect to derivative liabilities primarily due to a tightening of Nomuras credit spreads during the fiscal year. Gain (loss) on private equity investments were ¥1,371 million for the year ended March 31,
2017 and ¥(869) million for the year ended March 31, 2018.
Other
increased by 44% from ¥153,626 million for the year ended March 31, 2017 to ¥221,192 million for the year ended March 31, 2018,
primarily driven by gains from the liquidation of an investment in a foreign entity and gains from the sale of our controlling financial interest in Asahi Fire and Marine Insurance Co., Ltd.
Net interest revenue
was ¥128,717 million for the year ended March 31, 2017, ¥110,486 million for the year ended
March 31, 2018 and ¥58,616 million for the year ended March 31, 2019.
Net interest revenue
is a function of the level and mix of total assets and liabilities, which includes trading assets and financing and lending
transactions, and the level, term structure and volatility of interest rates.
Net interest revenue
is an integral component of trading activity. In assessing the profitability of our overall business and of our Global Markets business in
particular, we view
Net interest revenue
and
Non-interest
revenues
in aggregate. For the year ended March 31, 2019, interest revenue, including a dividend from our investment in American
Century Investments increased by 33%, and interest expense increased by 51% from the year ended March 31, 2018. As a result,
Net interest revenue
for the year ended March 31, 2019 decreased by ¥51,870 million from the year
ended March 31, 2018. For the year ended March 31, 2018, interest revenue, including a dividend from American Century Investments, increased by 33%, and interest expense increased by 52% from the year ended March 31, 2017. As a
result, Net interest revenue for the year ended March 31, 2018 increased by ¥18,231 million from the year ended March 31, 2017.
Gain (loss) on investments in equity securities
was ¥7,708 million for the year ended March 31, 2017,
¥2,683 million for the year ended March 31, 2018 and ¥(6,983) million for the year ended March 31, 2019. This includes both realized and unrealized gains and losses on investments in equity securities held for operating
purposes which are our investments in unaffiliated companies, which we hold on a long-term basis in order to promote existing and potential business relationships.
Non-interest
expenses
for the year ended March 31, 2019 decreased by 1% from
¥1,168,811 million for the year ended March 31, 2018 to ¥1,154,471 million, due to the absence of provisions in connection with legacy transactions in the Americas recorded slightly over ¥30.0 billion in the previous
year and due to lower bonus payment offset by goodwill impairment charge of ¥81,372 million attributable to Wholesale.
Non-interest
expenses
for the year ended March 31, 2018 increased by 8% from ¥1,080,402 million for the year ended March 31, 2017 to ¥1,168,811 million primarily due to an increase in
compensation and benefits in connection with deferred compensation and provisions of slightly over ¥30.0 billion in connection with legacy transactions in the Americas.
Income (loss) before income taxes
was ¥322,795 million for the year ended March 31, 2017, ¥328,158 million for
the year ended March 31, 2018 and ¥(37,701) million for the year ended March 31, 2019.
We are subject to a number of
different taxes in Japan and have adopted the consolidated tax filing system permitted under Japanese tax law. The consolidated tax filing system only imposes a national tax. Nomuras domestic effective statutory tax rate was approximately 31%
for the fiscal year ended March 31, 2017, 2018 and 2019, respectively. Our foreign subsidiaries are subject to the income taxes of the countries in which they operate, which are generally lower than those in Japan. The Companys effective
statutory tax rate in any one year is therefore dependent on our geographic mix of profits and losses and also on the specific tax treatment applicable in each location.
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