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Nomura Earnings Show Profit Rise, Revenue Decline Amidst Headwinds

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  Published in Stocks and Investing on Saturday, February 7th 2026 at 20:14 GMT by WTOP News
      Locales: JAPAN, UNITED STATES

Tokyo, Japan - February 8th, 2026 - Nomura Holdings, Japan's largest investment bank, today released its fiscal third-quarter earnings, painting a picture of a financial institution striving to maintain profitability amidst increasing global economic headwinds. While the bank reported a year-over-year increase in net attributable profit, a significant decline in revenue underscored the challenges facing the investment banking sector as a whole.

The earnings snapshot, covering the period ending December 31st, revealed a net attributable profit of JPY53.3 billion ($375 million USD), a modest increase from the JPY48.8 billion reported in the same quarter last year. However, this positive figure was tempered by a sharp drop in overall revenue, which decreased from JPY1.89 trillion to JPY1.69 trillion. This revenue contraction, analysts suggest, is indicative of broader trends impacting investment banks globally - namely, increased market volatility and a slowdown in deal-making.

Investment Banking Under Pressure

The primary driver of the revenue decline was a weaker performance in Nomura's investment banking division. Revenue from this segment plummeted to JPY182.5 billion, down from JPY212.8 billion a year prior. This reduction reflects a cooling of mergers and acquisitions (M&A) activity and a decrease in initial public offerings (IPOs) - both critical revenue streams for investment banks. Globally, 2025 and early 2026 have seen a noticeable slowdown in these areas, influenced by factors such as rising interest rates, geopolitical instability, and concerns about a potential recession in key economies.

"The results clearly demonstrate the pressures building within the investment banking landscape," commented Hiroshi Sato, a financial analyst at Mitsubishi UFJ Research and Consulting. "While Nomura managed to eke out a profit increase, driven by cost-cutting measures and potentially gains in other segments, the revenue decline is a worrying sign. It suggests that sustaining earnings momentum will be a significant challenge moving forward."

Restructuring Continues to Shape Performance

Nomura has been engaged in a substantial restructuring effort over the past several years, responding to a string of losses and strategic missteps. This overhaul involves streamlining operations, exiting non-core businesses, and focusing on areas where the bank believes it can achieve a competitive advantage. The effects of this restructuring are still being felt, with restructuring charges and associated costs continuing to impact financial performance. However, management maintains that these short-term pains are necessary to build a more sustainable and profitable business in the long run.

"The restructuring is a complex process, and it's not without its challenges," explained Kenji Tanaka, Nomura's Chief Financial Officer, during an earnings conference call. "We are making progress in simplifying our operations and improving our efficiency, but it will take time for these efforts to fully translate into improved financial results."

Full-Year Outlook Remains Steady, But Challenges Loom

Despite the mixed Q3 results, Nomura reaffirmed its full-year profit outlook, projecting net attributable profit of JPY155 billion for the fiscal year ending March 31st, 2026. This suggests that management remains confident in the bank's ability to navigate the current challenging environment. However, analysts caution that achieving this target will require continued cost discipline and a rebound in market conditions.

The bank's ability to compete with larger, global investment banks like Goldman Sachs and JPMorgan Chase remains a key focus. Nomura has been actively expanding its international presence, particularly in areas like equity research and prime brokerage, to attract a wider range of clients and diversify its revenue streams. Successfully executing this strategy will be crucial for its long-term success.

Broader Implications for the Investment Banking Sector

Nomura's earnings report serves as a microcosm of the challenges facing the broader investment banking sector. The combination of market volatility, rising interest rates, and geopolitical uncertainty has created a difficult operating environment. Banks are facing pressure on multiple fronts, including declining deal volumes, increased competition, and the need to invest heavily in technology to remain competitive. The current climate highlights the importance of robust risk management and a focus on long-term sustainability. The coming quarters will be critical in determining which banks can successfully navigate these turbulent waters and emerge stronger on the other side.