Nomura Annual Report 2008

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FY2008 Annual Report · Nomura

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Create Change. World-Class. Speed.

A n n u a l R e p o r t

2008for the Year Ended March 31, 2008

FSC certified paper is used for the
main body of this annual report.

Printed using soy inks.

Printed in Japan

Profile

Nomura is a leading financial services group and the

preeminent Asian-based investment bank with

worldwide reach. We provide a broad range of innovative

solutions tailored to the specific requirements of individual,

institutional, corporate, and government clients through an

international network in 30 countries. Based in Tokyo and

with regional headquarters in Hong Kong, London, and

New York, Nomura employs about 18,000 staff worldwide.

We are committed to establishing a strong position as a

financial services group with world-class competitiveness,

and have set a management target of achieving return on

equity (ROE) of between 10% and 15% on average over

the medium to long term. As we work towards these goals,

we remain focused on making a difference for our clients

through our five business divisions: Domestic Retail,

Global Markets, Global Investment Banking, Global

Merchant Banking, and Asset Management.

CONTENTS

Consolidated Financial Highlights (U.S. GAAP)

To Our Shareholders and Customers

Features

Instinet Growth Story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Consulting-Based Marketing of My Story Profit
Distribution-Type Fund

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Business Environment

Business Outline

Domestic Retail

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Global Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Global Investment Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Global Merchant Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Global Research

Corporate Governance and Internal Control System

Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Executive Officers and Business Division CEOs . . . . . . . . . . 39

Corporate Social Responsibility

Seven-Year Financial Summary (U.S. GAAP)

Major Subsidiaries and Affiliates/
Nomura Securities Domestic Network

Corporate and Other Data

Forward-Looking Statements
This annual report contains forward-looking statements about the future
plans, strategies, beliefs, and performance of Nomura Group.

These forward-looking statements are not historical facts. They are
expectations, estimates, forecasts, and projections based on information
currently available to the Company and are subject to a number of risks,
uncertainties, and assumptions, which, without limitation, include market
trends, economic trends, competition in the Japanese financial industry,
laws and regulations, and the tax system. As such, actual results may dif-
fer materially from those projected.

Annual Report 2008

Consolidated Financial Highlights (U.S. GAAP)
For the fiscal years beginning April 1 and ending March 31 of the following year
Note: These consolidated financial highlights are prepared solely for convenience. Readers are recommended to refer to the Form 20-F.

3/2004

3/2005

3/2006

3/2007

3/2008

Millions of yen

Millions of
*1

U.S. dollars

Operating Results:

Revenue

¥ 1,045,936

¥ 1,126,237

¥ 1,792,840

¥ 2,049,101

¥ 1,593,722

$ 15,961

Net revenue
Income (loss) before income taxes*2

Net income (loss)

803,103

282,676

172,329

799,190

204,835

94,732

1,145,650

1,091,101

787,257

545,013

304,328

321,758

175,828

(64,588)

(67,847)

7,884

(647)

(679)

Balance Sheet Data (Period End):

Total assets

Shareholders’ equity

¥29,752,966

¥34,488,853

¥35,026,035

¥35,873,374

¥26,298,798

$263,383

1,785,688

1,868,429

2,063,327

2,185,919

1,988,124

19,911

Return on equity (ROE)*3

10.1%

5.2%

15.5%

8.3%

(3.3)%

Per Share Data:

Net income (loss)—basic
Shareholders’ equity*4
Cash dividends*4

Cash Dividends:

Total annual dividends
Share buybacks*5

Yen

U.S. dollars

¥ 88.82

¥ 48.80

¥ 159.02

92.25

¥ (35.55)

$ (0.36)

919.67

15.00

962.48

20.00

1,083.19

1,146.23

1,042.60

48.00

44.00

34.00

10.44

0.34

Millions of yen

Millions of
*1

U.S. dollars

¥29,137

¥38,845

3,624

—

¥91,487

49,335

¥83,939

¥64,921

—

2,520

$650

Stock Price:

Stock price as of the end of March

(Tokyo Stock Exchange)

¥1,895

¥1,500

¥2,625

¥2,455

¥1,490

$14.92

*1 Calculated using the yen-dollar exchange rate of U.S.$1.00=¥99.85, the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal

Yen

U.S. dollars

Reserve Bank of New York on March 31, 2008.

*2 Total for continuing and discontinued operations for the fiscal year ended March 31, 2006.

*3 Calculation method: Net income (loss) divided by average shareholders’ equity.

*4 Calculated using the number of shares outstanding at year-end.

*5 Excludes purchases of shares less than one trading unit.

Nomura Holdings, Inc.

Net revenue &
income (loss) before income taxes*2

Net revenue
Income (loss) before income taxes

(Billions of yen)
1,200

Net income (loss) & ROE*3

Net income (loss) (lhs)

ROE (rhs)

(Billions of yen)
400

1,000

800

600

400

200

-200

3/04

3/05

3/06

3/07

3/08

300

200

100

-100

3/04

3/05

3/06

3/07

3/08

(%)
40

-10

Total assets

(Trillions of yen)

3/04

3/05

3/06

3/07

3/08

Total annual dividends &
share buybacks*5

Total annual dividends

Share buybacks

(Billions of yen)
100

3/04

3/05

3/06

3/07

3/08

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Annual Report 2008

To Our Shareholders and Customers

Kenichi Watanabe
President & CEO

Create Change. World

We are shifting strategic direction to become a
creating change in the capital markets, we aim
and in turn create opportunities for growth at

Nomura Holdings, Inc.

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Takumi Shibata
Deputy President & COO

-Class. Speed.

more client-driven, business-focused firm. By
to further the development of the overall market
Nomura.

Annual Report 2008

To Our Shareholders and Customers

Fiscal 2007 in Review

Summary of results for fiscal 2007

During the fourth quarter of fiscal 2007, ended March 31, 2008, we acted with

speed to implement specific measures aimed at minimizing future losses in our

credit instrument related activities as the business environment continued to

deteriorate due to turmoil in the global credit markets. As a result of these

moves, we reported a loss before income taxes of ¥64.6 billion and a net loss

of ¥67.8 billion for the year under review.

Despite the losses, the impact on our strong financial position was marginal

and we maintain some ¥1,988.1 billion in shareholders’ equity. We also moved

quickly and decisively to reduce our balance sheet in response to the deteriorat-

ing environment. We reduced overseas repo transactions, exited the U.S. resi-

dential mortgage-backed securities (RMBS) related business, and reduced our

exposure related to U.S. commercial mortgage-backed securities (CMBS).

Dividends

We declared an annual cash dividend for fiscal 2007 of ¥34 per share. Our tar-

get dividend for the current fiscal year, ending March 31, 2009, is ¥34 per

share. Once we have achieved a sufficient level of profit, the year-end cash divi-

dend will be increased, taking into consideration a payout ratio of over 30%.

New Management Structure

We are shifting strategic direction to become a more client-driven, business-

focused firm. By creating change in the capital markets, we aim to further the

development of the overall market and in turn create opportunities for growth

at Nomura.

Management vision

Our management vision centers on three areas: (1) aim to become a financial

services group with world-class competitiveness, (2) create change to con-

tribute to the development of capital markets and generate growth opportuni-

ties, and (3) act as a bridge between Asia including Japan and Europe and the

United States.

To realize our vision, we aim to create change, be world-class, and act with

speed.

Nomura Holdings, Inc.

Top-down decision making by the CEO, COO,
and five business division CEOs

We have set up a Group Management Committee, which includes the Chief

Executive Officer (CEO), the Chief Operating Officer (COO), the CEOs of the five

business divisions, and the Head of Regional Management, Europe, who is

based in London. We have adopted this structure to facilitate prompt top-down

decision making to deal with rapid changes in the operating environment. The

CEOs of the business divisions are now expected to fulfill their duties as the

leaders of their divisions while also thinking about the management of Nomura

Group as a whole.

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Top management directly engaged in risk management

We have also formed a Risk Management Committee and Risk Management Sub

Committee, making it possible for top management to become directly engaged

in risk management. We will now work to change our risk management structure

from one that focuses mainly on trying to measure risk to one that is geared to

anticipate risks. Our previous risk management focused mainly on ascertaining the

current state of illiquid positions. Now, as previously liquid positions are becoming

illiquid, the Risk Management Sub Committee will closely monitor all positions.

Reaffirmation of matrix management

We have adopted a matrix management approach, under which our businesses

are run jointly by regional managers in Europe, the United States, and Asia and

the CEOs of the five business divisions. This approach relies on open communi-

cation among the regional heads and divisional CEOs, complementary relation-

ships, and mutual checking functions.

New Management Structure

CEO

COO

Group Management Committee

Risk Management Committee

Five Business Division CEOs

Risk Management
Sub Committee

Domestic Retail

Global Markets

Global Investment
Banking

Global Merchant
Banking

Asset
Management

Annual Report 2008

To Our Shareholders and Customers

Dealing with Credit Market Turmoil

We have taken the following steps in response to the recent turmoil in the global

credit markets.

Reduced balance sheet, increased shareholders’ equity
and long-term debt ratios

We have reduced overseas repo transactions and taken other measures to

reduce the size of our balance sheet. As a result, our total assets declined from

about ¥36 trillion as of March 31, 2007, to approximately ¥26 trillion as of March

31, 2008. Reflecting cutbacks in balance sheet items, the ratio of shareholders’

equity to total assets rose from 6.1% to 7.6% over the same period. In addition,

we have increased the ratio of long-term borrowings to total liabilities.

Reduced B/S; Increased Shareholders’ Equity Ratio and Long-term Debt Ratio

Total assets (lhs)

Long-term debt ratio (rhs)*
Shareholders’ equity ratio (rhs)**

(Trillions of yen)
40

(%)
40

3/2007

3/2008

*Long-term debt ratio = (long-term borrowings/total liabilities) x 100.
**Shareholders’ equity ratio = (total shareholders’ equity/total assets) x 100.

Credit Ratings*

S&P
Moody’s
R&I
JCR

*As of June 30, 2008.

Nomura Holdings
Long-term Short-term

A-
A3
AA-
AA

A-2
—
a-1+
—

Nomura Securities

Long-term
A
A2
AA-
AA

Short-term
A-1
P-1
a-1+
—

Immediately following the announcement of our results for fiscal 2007, Standard

& Poor’s (S&P), Moody’s Investors Service, Rating and Investment Information

(R&I), and Japan Credit Rating Agency (JCR) reconfirmed their ratings and out-

looks for Nomura Holdings and Nomura Securities.

Nomura Holdings, Inc.

Exited U.S. RMBS-related business, increased provisions
for exposure to monoline insurers

We also moved decisively in response to the direct effects on our position due to

turmoil in the global financial markets arising from the subprime loan problems in

the United States. We exited the U.S. RMBS-related business and we have

reduced the exposure in our U.S. CMBS-related business to ¥130 billion as of

March 31, 2008.

We have also made full provisions, as of March 31, 2008, for our exposure to

lower-rated monoline insurers to prevent future losses. Even after the beginning

of fiscal 2008, the environment surrounding the monoline insurers continues to

be uncertain. We are, therefore, continuing to keep a close watch on the finan-

cial standing of these insurers and will respond flexibly as needed.

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U.S. Mortgage Finance Business Related Exposure

OU.S. RMBS-related

OU.S. CMBS-related

(Billions of yen)
300

250

200

150

100

250

200

150

100

Exit

6/2007

9/2007

12/2007

3/2008

6/2007

9/2007

12/2007

3/2008

Capital Policy for Growth

In times of turbulence in the business environment, we must look for opportunities

to expand and grow over the medium to long term. In that sense, we have been

presented with an unprecedented opportunity to catch up with our foreign rivals.

Raising subordinated debt for efficient use of capital,
positioning financial standing for future growth

To move with speed and make investments for future growth, we issued ¥120

billion in subordinated bonds in March 2008. We also made arrangements with

Annual Report 2008

To Our Shareholders and Customers

a number of leading financial institutions to borrow subordinated loans. As of

July 31, 2008, we had raised a total of approximately ¥600 billion from subordi-

nated loans and subordinated bonds.

Another objective of raising the subordinated debt is to improve our capital

structure, which is currently dominated by shareholders’ equity. As such, we are

revising our capital structure by increasing the ratio of subordinated debt in

order to increase capital efficiency.

Capital Policy for Growth

Raised approximately ¥600 billion through
subordinated bonds and subordinated loans

Subordinated debt

Shareholders’
equity

Raising
subordinated debt
to increase capital
efficiency

Laying foundation
for proactive
investment aimed
at future growth

Solid Client Base in Japan

Nomura’s Domestic Client Assets

Our Domestic Client Assets* account for about 30% of the equities, investment

29.8%
Domestic Client Assets
¥72.2 trillion

Investment-Related
Assets
¥242 trillion
(Japan)

trusts, bonds, and other investment-related asset portion of Japan’s ¥1,500 trillion

in personal financial assets. In addition, we have close relations with corporates

and institutions, acting as underwriter for over 60% of listed companies in Japan.

Global Markets has long-standing relationships with institutional investors devel-

oped through our equities and fixed income businesses. These relations with a

As of March 31, 2008

Source: Nomura, based on Bank of Japan data.

Figures are preliminary.

broad base of clients are invaluable to our operations.

Our ability to provide these clients with world-class products and services will

underpin our future growth. To that end, we must take a cross-divisional

approach to identify the changing needs of our clients and focus more on deliver-

ing services that tap the strengths of the entire Group.

*Domestic Client Assets: Total of client assets in custody in Domestic Retail (including regional financial institutions) and

Financial Management Division.

Nomura Holdings, Inc.

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Medium-term Targets
ROE of 10%–15%, Revenue Capable of Generating Pretax Income of ¥500 billion

Our management target of ROE of between 10% and 15% over the medium to

long term remains unchanged.

Although the turmoil in the global financial markets continues, we are looking

to build a revenue base capable of generating ¥200–¥250 billion in pretax

income. We are also aiming to have a revenue structure in place that will allow

us to book ¥500 billion in pretax income in three years.

Major changes in the environment and competitive conditions in financial

markets are expected to continue. We intend to anticipate these changes and

respond accordingly to achieve further growth.

Acting with speed does not mean that we will make rash decisions. We will

take a logical and flexible approach to decision making. Even regarding past

decisions, we will make necessary changes in line with the prevailing operating

environment and competitive conditions to be better positioned to build a rev-

enue base geared towards future growth.

The job of the new management team is to ensure stable revenue and

respond to market changes by leveraging Nomura’s strengths to generate addi-

tional profits.

(Billions of yen)

600

500

400

300

200

100

-300

¥122.3 bn

¥53.3 bn

¥(226.2) bn

3/2008

Domestic Retail

World-class investment services

Trusted partner

Global Markets

Product center of excellence:

Delivering sophisticated services to retail and wholesale clients

Global Investment Banking

Asia’s preeminent investment bank

Engine to drive Nomura Group revenue expansion

¥165.0 bn

¥200.0 bn

¥22.8 bn

¥31.0 bn

¥50.0 bn
¥35.0 bn
¥55.0 bn

Global Merchant Banking

Leading presence in private equity

Asset Management

World-class player with strong investment capabilities in Japan

and Asia

Annual Report 2008

To Our Shareholders and Customers

International Strategy

Expanding international business with global platform based
in London and Tokyo

Our international strategy is another key to growth. Together with Japan, our

operations in London are a cornerstone of our global strategy based on exten-

sive expertise and experience gained through developing products and servic-

es. In the United States, we have nearly finished our downsizing. However,

as the United States is a leading financial center, it will remain an essential part

of our operations and we will monitor the environment and add on functions as

necessary.

Our acquisition of Instinet and capital participation in Fortress Investment

Group are examples of our strategy to not limit ourselves to organic growth if

there are functions that we need and the industry-leading expertise is available.

Making strategic moves in Asia and emerging markets

We will invest aggressively in markets with prospects for future growth.

Emerging markets such as Central and Eastern Europe, the Commonwealth of

Kenichi Watanabe,
President & Chief Executive Officer

Hitoshi Tada,
Chief Executive Officer,
Domestic Retail

Akira Maruyama,
Chief Executive Officer,
Global Markets

Hiromi Yamaji,
Chief Executive Officer,
Global Investment Banking

Nomura Holdings, Inc.

Independent States (CIS), the Middle East, China, and India are not only recipi-

ents of foreign investment but also investors in their own right. Therefore,

demand for financial services going both ways is increasing significantly. In addi-

tion to our client base in Japan, we are looking to increase services for Asia and

other emerging markets by fully leveraging our capabilities to supply products

from Japan and London.

Into fiscal 2008, concerns about the emergence of global inflation and an

economic downturn have risen, and the uncertainties in the environment sur-

rounding financial and capital markets continue to be challenging. Nevertheless,

we have a strong financial position, and we believe major business opportunities

are unfolding around us. It is time for us to augment our position, look to the

future, and steer the firm toward future growth. We look forward to your contin-

ued support.

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August 2008

Kenichi Watanabe
President & CEO

Takumi Shibata,
Deputy President & Chief Operating Officer

Shoichi Nagamatsu,
Chief Executive Officer,
Global Merchant Banking

Atsushi Yoshikawa,
Chief Executive Officer,
Asset Management

Yugo Ishida,
Head of Regional Management,
Europe

Annual Report 2008

Feature

Instinet Growth Story

Nomura Holdings acquired Instinet in February 2007. Instinet provides institutional investors with the

necessary trading tools, alternative trading system (ATS) platforms, and global agency liquidity to

achieve high-quality trade execution. With the ongoing global trend toward best execution, Instinet is

well-placed to capitalize on new business opportunities. Nomura seeks to achieve further growth by

making full use of Instinet’s cutting-edge technology platform, specialized knowledge base, and exten-

sive experience.

Optimal Solutions for Institutional Investors

The demand for equity trading execution services is rapidly

(MiFID) in the European Union in November 2007, brokers

expanding globally, driven largely by technological advances

are now required by law to obtain best execution for their

in the available trading tools.

clients. These developments are spreading to Japan and the

In the United States, institutional investors placing large

rest of Asia and are pushing up demand for cutting-edge

orders seek to avoid causing major fluctuations in equity

trade execution services.

prices as a consequence of their trading activities.

The unbundling of research and execution has led to an

Increasingly, these investors are breaking their trades into

increase in the number of clients who select brokers purely

smaller lots and requesting that their trades be executed in

on the basis of their execution capabilities. As such, Nomura

markets that offer the best prices. In addition, as a result of

recognized the need for a global order platform and

the tightening of restrictions by the U.K. Financial Services

enhanced execution capabilities. By acquiring Instinet, we

Authority (FSA) in March 2005, securities firms are increas-

were able to blend our high-quality research with a solid plat-

ingly unbundling research and execution services and quot-

form to deliver optimal solutions for order execution to meet

ing the costs of these services separately. Moreover, with

the demanding needs of investors.

the advent of the Markets in Financial Instruments Directive

Business: Leading agency broker, providing electronic trading services to institutional investors Services: Electronic trading based on

Nomura Holdings, Inc.

Regulatory Changes in Europe
and the United States

United States: Regulation NMS
EU: Markets in Financial Instruments Directive

(MiFID)

Client Order Flow

Investor Needs

Shift from the concentration of client order flows
on stock excha nges t o alte rna tiv e trad ing
systems, resulting in the dispersal of trading into
a range of markets

Inv est ors demand the best tech nol ogy and
platform s to achiev e the best execut ion of
trades.

Execution Capabilities

Instinet offers an execution platform capable of accessing more than 80
securities markets in over 40 countries and provides cutting-edge execution
technologies (algorithmic trading, transaction cost analysis (TCA), etc.).

Collaboration

Execution Experts™ Newport™ SmartRouter™

Access to Liquidity

Instinet CBX™ Chi-X®

JapanCrossing™ KoreaCross™

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Revenue Expansion

Recently, as world stock markets fluctuated sharply due to

meanwhile, set new records. In the United States also, orders

turmoil in the financial markets, the increased volume of

from hedge funds investing globally increased, and Instinet

transactions led to an expansion in revenue at Instinet. In all

steadily expanded its market share of transactions and

geographic regions, trading agreements from all client seg-

reported new records for transactions on a volume basis.

ments, especially orders from hedge funds, showed signifi-

cant expansion. Trading on a value basis in Europe and Asia,

Chi-X

In March 2007, Chi-X Europe, a subsidiary of Instinet, com-

Chi-X Europe’s Average Daily Single-Sided Trading Volume

menced operation as a multilateral trading facility (MTF).

Following the implementation of MiFID in the European

Union, rules requiring brokers to route client orders through

public exchanges were abolished. As a result, Chi-X Europe

has seen a surge in order flow as investors seek to gain the

benefits of its superior execution capabilities, including exe-

cution speeds and messaging capacities significantly greater

than those of European exchanges, and at prices that are up

to one-tenth the cost. By April 2008, Chi-X Europe’s execut-

ed volume regularly exceeded 10% of the total FTSE 100

volume. By having its systems ready before the implementa-

tion of MiFID, Chi-X Europe has been able to reap the bene-

fits as a pioneering MTF.

Chi-X Europe will continue to increase its coverage, which

currently includes component stocks of German, Dutch,

British, French, Swiss, Scandinavian, and Belgian indices.

(Millions of euros)
2,000

1,600

1,200

800

400

2007
Mar.

Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec.

2008
Jan.

Feb. Mar. Apr.

a sophisticated technology platform, including algorithmic trading and global portfolio trading systems

Annual Report 2008

Feature

Consulting-Based Marketing of

T he My Story Profit Distribution-Type Fund is the largest equity fund marketed by Nomura Securities, with

net assets of approximately ¥1,800 billion as of March 31, 2008. This fund was developed based on feed-
back from our customers, who find themselves in the midst of a tough investment environment characterized
by low savings deposit interest rates, the removal of blanket government guarantees on bank deposits,
uncertainty about Japan’s pension fund system, and concerns about inflation. We developed the My Story
Profit Distribution-Type Fund in response to customer requests for a diversified fund that invests in a range
of asset types. This fund has won the trust of a broad range of customers because of its management philos-
ophy of aiming for long-term stable performance and periodic distributions.

My Story Profit Distribution-Type Fund in Profile

This fund is based on the concept of providing asset man-
agement support to customers and was created with the
idea that it would be a core investment in customer portfo-
lios, offering them a long-term investment they can hold for
many years.

Since the fund pays regular distributions every other
month, it provides retirees with a supplement to their govern-
ment pension payments, which are paid in the even months
of the year. This bimonthly distribution feature was designed
into the fund to appeal to members of the baby-boom gen-
eration, who have recently been retiring in large numbers.
The fund is designed to respond to the needs of mature,

retired investors, and it draws on the services of a number of
fund management companies and invests in a balanced
portfolio of bonds and stocks. It is thus stable in the face of
fluctuations in the economy, and aims to offer the benefits of
regular distributions along with capital gains.

Moreover, as the fund is designed as a fund of funds, it is
able to diversify its holdings by investment style and by
investment manager, in addition to achieving asset diversifi-
cation. Another distinguishing feature of the fund is that since
the features of the funds it invests in may evolve over time,
managers continually monitor the funds they have invested in
and reshuffle their portfolios as deemed appropriate.

My Story Net Assets* (Month-End Balances)

My Story Profit Distribution-Type Fund (Six times per year)
My Story Stock VA

My Story Stock DC
My Story Stock 25, Stock 50, Stock 75, Stock 100, and Japan Stock 100

(Billions of yen)

2,500

2,000

1,500

1,000

500

2001

2002

2003

2004

2005

2006

2007

2008

*Balances also include net amounts of funds sold by companies other than Nomura Securities.

Nomura Holdings, Inc.

My Story Profit Distribution-Type Fund

Marketing Based on In-depth Consulting

Nomura Securities has increased the balance of funds
invested in its My Story Profit Distribution-Type Fund by pro-
viding customers with in-depth consulting to meet their
financial needs. Nomura Securities offers a consulting ser-
vice entitled Nomura Asset Design that enables customers to
receive advice from Nomura consultants. Based on specific
information obtained in conversation with customers regard-
ing their objectives, events that seem likely to occur in the
future, and risk-return profile, Nomura consultants are able
to assist customers in addressing their concerns about the
future and propose specific financial plans. This capability to
offer consulting-based marketing is one of Nomura’s key
strengths.

Sales of the My Story Profit Distribution-Type Fund were
relatively slow at first, as most retail investors were not famil-
iar with fund of funds. However, we were able to familiarize
customers with the product through proactive communica-
tion, and many began to shift funds such as maturing time
deposits into the My Story Profit Distribution-Type Fund.
Satisfied customers also introduced other potential cus-
tomers, and net assets have expanded substantially.

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Financial plan proposals for customers

Annual Report 2008

Business Environment

Winning Client Trust,
Pursuing Growth in Changing

Personal Financial Assets

P Individuals are diversifying their portfolios to include more risk assets because of such factors as low savings rates, continuing
uncertainty regarding Japan’s pension system, and the removal of the government’s blanket guarantees on savings deposits.

Japan (Economic Trough)
March 31, 2003: ¥1,356 trillion

Japan (Present)
March 31, 2008: ¥1,490 trillion

Equities:

Bonds:

5.3%

1.7%

Investment trusts:

2.1%

Total risk
assets:
9.1%

Cash and deposits:
56.5%

Insurance and
annuities:
27.8%

Insurance and
annuities:
27.0%

Equities:

Bonds:

9.3%

2.7%

Investment trusts: 4.2%

Total risk
assets:
16.3%

Cash and deposits:
52.0%

Source: Nomura, based on data issued by the Bank of Japan and the U.S. Federal Reserve Bank. Figures for March 31, 2008, are preliminary.

Equity Capital Markets Bookrunner League Table—Japan Equity & Equity-Related

M&A Financial Advisors

Proceeds (Total, lhs)

Nomura’s share (rhs)

(Billions of U.S. dollars)
60

3/1999

3/2000

3/2001

3/2002

3/2003

3/2004

3/2005

3/2006

3/2007

3/2008

(%)
60

Rank value (Total)

Nomura’s ranking

(Billions of U.S. dollars)
250

6th

5th

10th

200

150

100

3/1999

3/2000

3/2001

Source: Thomson Reuters.

Nomura Holdings, Inc.

Business Environment

P The percentage of risk assets in personal financial
assets is much lower in Japan than in the United States.

United States
March 31, 2008: $44.1 trillion

Equities:

Bonds:

29.1%

8.8%

Investment trusts:

14.1%

Total risk
assets:
52.0%

Cash and deposits:
13.9%

Insurance and
annuities:
30.3%

Japanese Market for Publicly Offered Stock
Investment Trusts

Net assets (lhs)

Nomura’s share* (rhs)

(Trillions of yen)
80

3/2003

3/2004

3/2005

3/2006

3/2007

3/2008

*Nomura Asset Management.

Source: The Investment Trusts Association, Japan.

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40

League Table—Any Japanese Involvement Announced

Ratio of M&A to Nominal GDP

4 th

2nd

3rd

1st

3rd

1st

Japan United Kingdom France
United States Canada Australia

(%)
25

3/2002

3/2003

3/2004

3/2005

3/2006

3/2007

3/2008

2001

2002

2003

2004

2005

2006

2007

Source: Nomura, based on data issued by the International Monetary Fund (IMF)

and Thomson Reuters.

Annual Report 2008

Business Outline

Domestic Retail
Offers consulting services and financial products to

(Billions of yen)
500

Net revenue

Income (loss) before income taxes

meet investment needs

FY2007

p Net revenue

¥402.0 billion (-8.7% YoY)

p Income before income taxes ¥122.3 billion (-24.0% YoY)

Global Markets
Handles origination, sales, and trading of bonds,

equities, foreign exchange, and derivatives for insti-

tutional investors in Japan and international markets

FY2007

p Net revenue

¥95.6 billion (-67.0% YoY)

p Loss before income taxes

¥226.2 billion

400

300

200

100

3/2004

3/2005

3/2006

3/2007

3/2008

(Billions of yen)
400

300

200

100

-100

-200

-300

3/2004

3/2005

3/2006

3/2007

3/2008

Global Investment Banking
Underwrites bond and equity issues, provides M&A

(Billions of yen)
100

and financial advisory services

FY2007

p Net revenue

¥83.1 billion (-16.2% YoY)

p Income before income taxes ¥22.8 billion (-48.7% YoY)

Global Merchant Banking
Uses Nomura’s own capital to make private equity

investments and investments in venture companies

FY2007

p Net revenue

¥64.8 billion (-0.3% YoY)

p Income before income taxes ¥53.3 billion (+1.0% YoY)

Asset Management
Delivers a diverse lineup of investment trusts and

asset management services as well as administra-

tive services for defined contribution pension plans

FY2007

p Net revenue

¥90.6 billion (+0.6% YoY)

p Income before income taxes ¥31.0 billion (-15.0% YoY)

3/2004

3/2005

3/2006

3/2007

3/2008

(Billions of yen)

-20

3/2004

3/2005

3/2006

3/2007

3/2008

(Billions of yen)
100

3/2004

3/2005

3/2006

3/2007

3/2008

Nomura Holdings, Inc.

Customer Base Continues to Expand Steadily

The overall market slump triggered by turmoil in the global financial markets led to a decline in brokerage commissions;
however, the distribution of newly launched investment trusts was robust, especially for bond investment trusts, and com-
missions for the distribution of investment trusts remained at the same level as last year. Sales of structured bonds
declined as a result of the rapid rise of the yen, leading to lower sales credit. However, sales of foreign currency bonds
were strong in the second half of the year. Although Domestic Client Assets* declined by ¥13 trillion from the prior year, to
¥72.2 trillion, due to the impact of the downturn in the stock market, our client base steadily expanded, with net asset
inflow of ¥4.9 trillion and an increase of 213,000 accounts with balance, to a total of 4.165 million accounts.

*Domestic Client Assets = Total of client assets in custody in Domestic Retail (including regional financial institutions) and Financial Management Division.

Credit Market Turmoil Led to Loss

The environment in Fixed Income remained harsh, as a global credit crunch sparked by subprime problems hit and the yen
appreciated sharply. Amid this environment, Fixed Income revenue declined as a result of significantly increased provisions
made for transactions with monoline insurers, a realized loss booked on our exit from the U.S. residential mortgage-backed
securities (RMBS) related business, and a realized and unrealized loss in the U.S. commercial mortgage-backed securities
(CMBS) related business. In Equity, although trading revenue from multiple private offerings (MPOs) and equity derivatives
declined, revenue increased thanks to the contribution from Instinet, which was acquired in February 2007, expanded order
flow for non-Japanese equities, and trading of listed equities. Meanwhile, expenses increased due to a rise in commissions
and floor brokerage as a result of higher revenue at Instinet.

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Ranked First in League Tables for “Japan Equity & Equity-Related” and “Any Japanese Involvement Announced”

While the mergers and acquisitions (M&A)-related business remained strong and we maintained our high market share,
revenue decreased due to a marked decline in overall transaction value in the equity finance market. In equity financing, we
acted as lead manager on major deals for Sony Financial Holdings and Yamada Denki, and ranked No. 1 in the “Japan
Equity & Equity-Related” league table* for the seventh straight year in fiscal 2007.

In M&A, we acted as financial advisor on All Nippon Airways’ sale of its hotel business and the tender offer by Promise to
acquire all shares in Sanyo Shinpan Finance. We topped the fiscal 2007 “Any Japanese Involvement Announced” league
table*. Internationally, we were global coordinator on Russia’s largest-ever initial public offering (IPO), for PIK Group, a major
Russian residential property developer.

*Source: Thomson Reuters.

New Private Equity Investments and Exits Proceeding Smoothly

We booked realized and unrealized gains on the sale of Deutsche Annington and valuation at fair value of Annington in the
United Kingdom, both investee companies of Terra Firma*, as well as on the sale of our stake in Nomura Principal Finance
investee companies Sliontec and Wanbishi Archives.

*Terra Firma is an independent private equity firm based in Europe.

Robust Sales of Newly Launched Funds

Assets under management grew on the back of firm sales of newly launched funds, such as the Nomura New Global High
Interest Rate Currencies Fund, and existing balanced funds, such as the My Story Profit Distribution-Type Course B Fund,
as well as new mandates in the domestic and overseas investment advisory business. However, deteriorating market con-
ditions due to the slump in stock prices and appreciation of the yen led to a ¥1.2 trillion decline in the outstanding balance
of assets under management from the prior year, to ¥25.8 trillion.

Although asset management fees increased, unrealized losses were booked on pilot funds* and seed money** for new
product development and revenue was flat compared to the prior year, which included realized gains booked on sales of
affiliated companies. Compensation and benefits were up due to increased headcount, and information technology
expenses increased due to new investment.

*Funding for product development.

**Funding used to originate funds when launching new products.

Annual Report 2008

D o m e s t i c R e t a i l

World-Class Investment Services, Trusted

Business Environment

Increasingly Sophisticated and Diverse Investor
Needs, Heightened Competitive Environment

Becoming World-Class
Amid this environment, we are further developing our invest-

ment services and products to ensure we continue to meet

As a result of continued low interest rates in Japan and uncer-

world-class standards. At the same time, we aim to be a trust-

tainties regarding the pension system, individuals are continuing

ed partner of our customers and have set the goal of increasing

to shift their financial assets from savings to investment prod-

Domestic Client Assets, which are a measure of the confidence

ucts. In view of the interest rate differentials between Japan and

that customers have in Nomura, to ¥110 trillion over the next

overseas financial markets as well as the retirement of Japan’s

three years.

baby boomers, which started in earnest last year, this trend

toward investment products is expected to continue in the

medium to long term.

Providing Higher-Quality Products and Services

Improving Efficiency, Increasing Customer Consultations

Customers who have diversified their portfolios are looking

To make more time for consultations with our customers, we

for investment products and services tailored to their individual

are taking significant steps to increase the efficiency of opera-

needs, and investors’ requirements are becoming more sophis-

tions at our branch offices. These initiatives have included

ticated and diverse. Moreover, as the megabanks and foreign

switching our ATMs to Seven Bank, eliminating the handling of

financial institutions increase their presence in growth sectors in

cash, concentrating back-office functions, and delivering docu-

Japan’s financial markets, competition is intensifying, and finan-

ments electronically. In addition, by increasing the number of

cial institutions must offer higher-quality products and services

customer inquiries handled by call centers, we are improving

as well as improved consulting services to meet customer

responsiveness and increasing efficiency, making it possible

needs.

to spend more time in face-to-face consultations with our

customers.

Domestic Client Assets—Net Asset Inflow*

Domestic Client Assets and Accounts with Balance

(Trillions of yen)
8

Domestic Client Assets (lhs)

Accounts with balance (rhs)

(Trillions of yen)
100

(Millions)
5

3/2003

3/2004

3/2005

3/2006

3/2007 3/2008

3/2003

3/2004

3/2005

3/2006

3/2007 3/2008

*Excludes portion from regional financial institutions.
Net asset inflow = asset inflow - asset outflow.

Note: Domestic Client Assets = Total of client assets in custody in Domestic Retail
(including regional financial institutions) and Financial Management Division.

Nomura Holdings, Inc.

Partner

Hitoshi Tada,
Chief Executive Officer,
Domestic Retail

A Wider Variety of Products and Services

Nagoya, and Osaka, where there is a high concentration of

We have adopted an open-architecture strategy for products

financial assets. We will continue to open new branches that

and created a structure that makes it possible to offer the best

focus on providing services to meet the needs of specific

products to meet a wide range of customer needs and market

regions, such as Nomura Cube consultation booths* and

conditions.

branches without back-office functions. Also, by opening more

In addition to our Nomura Fund Wrap management account,

online outlets we will be able to approach customers that we

which requires a minimum balance of ¥10 million, we have

have not reached sufficiently in the past, such as asset builders.

added a Value Program, which offers fund management for

amounts starting at ¥5 million. This new account helps cus-

tomers reach their financial objectives by making use of cost-

efficient index fund management. We will continue to focus on

providing investment consulting and fund management services

for a broader base of investors.

To give our customers more freedom in terms of cash man-

agement, we offer loans using stock holdings and other securi-

ties as collateral.

A Broader Interface with Clients

Increasing Number of Branch Offices Offering Different

Functions and Services, Improving Quality

In response to the transition to electronic shares in 2009, we

have added over 30 new branches since 2006, mainly in Tokyo,

*Nomura Cube consultation booths are permanently staffed and offer easy access for
passersby to receive investment information and brochures on financial products.

Diverse Approaches

With “Hotto Direct,” we are offering efficient telephone response

via call centers and online services to our customers not only

during regular business hours but also on weekends and after

regular office hours on weekdays.

In addition, we are holding Nomura Money Fairs more fre-

quently and are offering more information and services through

seminars for people approaching retirement as well as Japan’s

equivalent of employee stock ownership plans.

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Expansion of Client Interface
Addition of branch offices mainly in Tokyo, Nagoya, and Osaka in line with the geographical
distribution of high-net-worth individuals and physically held stock certificates

Client Assets Held by Branches Opened since 2006

223

4,618

413

2,921

2,046

663

528

655

400

Number of shareholders with
physically held stock certificates
(Thousands of people)*
Location of Nomura Securities branches
10 branches
1 branch
New branches opened since 2006
10 branches
1 branch

*Source: Nomura, based on Japan Securities Dealers Association, Reform Promotion
Center for Securities Clearing and Settlement System, “Distributional Survey
of Stock Certificates Physically Held by Shareholders (December 2007).”

(Billions of yen)
200

150

100

3/2006

3/2008

Annual Report 2008

G l o b a l M a r k e t s

Product Center of Excellence:
Delivering Sophisticated Services to Retail

Business Environment

Subprime Loan Fallout

The subprime loan problems caused by the decline in the mar-

ket for U.S. residential mortgage-backed securities (RMBS)

have had a number of knock-on effects. These include the drop

in the market for U.S. commercial mortgage-backed securities

(CMBS), deterioration in the performance and credit standing of

monoline insurers, and volatility in foreign exchange markets. In

the latter half of 2007, market liquidity began to dry up, and

severe business conditions persisted worldwide, adversely

impacting the performance of many financial institutions.

Evolving Client Base

In recent years, new types of investors such as hedge funds,

private banks, and private equity funds have taken on an

increasingly prominent role alongside traditional institutional

investors. Rising commodity prices and growth in emerging

Market Changes

Recent market developments include the movement in the

United States toward best execution to minimize the impact of

large orders on securities prices and the shift toward the

unbundling of research and order execution fees following the

tightening of regulations by the U.K. Financial Services Authority

(FSA) three years ago. Also, as a result of the implementation of

the Markets in Financial Instruments Directive (MiFID) in the

European Union in November 2007, the rule that allowed EU

member states to require brokers to route client orders through

regulated markets has been abolished, and brokers are now

required to use the exchange offering the best execution. These

developments have led to a rapid rise in demand for equity trade

execution services that incorporate cutting-edge technologies.

Becoming World-Class
Product Center of Excellence

economies, meanwhile, have seen sovereign wealth funds gain

In Fixed Income, we have set the objective of becoming a top-

attention as new suppliers of risk capital.

class fixed income house in Japan and the rest of Asia. In Equity,

At the same time, investor interest in sophisticated hybrid

we will leverage our dominant position in the Japanese market to

investment products is increasing and this area is expected to

establish our position as an Asian equity house with a competitive

grow into a core business.

advantage in Japanese equities and become a bulge bracket firm

World Foreign Exchange Reserves

World GDP Growth Forecast

Advanced countries (excluding Japan and Norway)
Major oil-producing countries

Japan
Other developing countries

China

World total

Advanced countries

Emerging and developing countries

(Trillions of U.S. dollars)
7

(%)
9

1985

2007

1980

2013

Notes: 1. Major oil-producing countries: OPEC member countries, Norway, Russia, and Mexico.

2. Reserves denominated in special drawing rights (SDRs) have been converted to U.S. dol-

Note: Figures for 2007 and later are forecasts.
Source: IMF (forecasts as of April 2008).

lars using the average rate for the year.
Source: Nomura, based on IMF and Thomson Reuters data.

Nomura Holdings, Inc.

Akira Maruyama,
Chief Executive Officer,
Global Markets

and Wholesale Clients

in the pan-Asian equity brokerage business. In Asset Finance, we

being put to use to offer investment opportunities to our

are enhancing our expertise to supply financial products that

Japanese client base, as well as to new international clients such

meet investors’ real estate related investment needs.

as investment funds and private banks.

Expanding and Enhancing Client Base

commodity-linked products and enhancing systems that support

We are also expanding our offerings in the area of credit and

Along with the expansion in the investor base for structured

product distribution.

product sales, we are working with our colleagues in Global

Investment Banking to expand and reinforce our client base. In

P Equity

broadening our investor base, we are targeting hedge funds,

We are extending our product origination and offering capabili-

sovereign wealth funds, international private banks, high-net-

ties for Japanese equities as well as our industry-leading

worth individuals in Asia, China’s Qualified Domestic Institutional

research and sales strengths to include pan-Asian equities.

Investors, and Japanese real estate investment trusts (J-REITs)

Our lineup of exchange-traded funds (ETFs), including the

as well as other real estate investment funds. At the same time,

Next Funds series developed by Nomura Asset Management

we are responding to the funding needs for project finance as

and ETFs listed on exchanges outside Japan, is growing, and

well as of regional financial institutions and local governments.

we are developing and supplying equity derivative products.

Enhancing Products and Services

execution is increasing and the trend is toward the unbundling

We are building up our capabilities for originating and develop-

of execution and research, we are offering execution services

ing products and delivering financial solutions to our clients.

based on cutting-edge technologies such as algorithmic trading

Moreover, in today’s market, where the demand for best

P Fixed Income

and transaction cost analysis (TCA). Through the combination

of Nomura’s comprehensive services and Instinet’s execution

Our expertise in developing structured products in Japan’s low

capabilities, we are well positioned to respond to the needs of a

interest rate environment and our derivative structuring skills are

broad spectrum of investors.

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Average Monthly Equity Transactions in Asian Markets
(Excluding Japan and China)

(Billions of U.S. dollars)
800

600

400

200

2003

2004

2005

2006

2007

Source: World Federation of Exchanges.

P Asset Finance

In real estate finance, we offer high-value-added services includ-

ing financial advisory, the structuring of privately placed funds

and CMBS, equity and mezzanine financing, and other services

through a one-stop approach that draws on the capabilities of

DBJ Nomura Investment (DNI) and Nomura Capital Investment

(NCI), where appropriate. We are also branching out into real

estate management operations, mainly through DNI, and are

looking to deliver Asian real estate related products to clients.

In addition, NCI delivers a flexible range of solutions to

clients, focusing on providing financing for corporate M&A and

buyouts.

Annual Report 2008

G l o b a l I n v e s t m e n t B a n k i n g

Asia’s Preeminent Investment Bank,
Engine to Drive Nomura Group Revenue

Business Environment

This will no doubt stimulate realignment inside Japan and

spur the formation of global alliances, thereby increasing

M&A Taking Off in Japan,
Corporates Shifting Gear in Global Strategies

demand for investment banking services.

*Source: Thomson Reuters.

To raise their corporate value and stay ahead in today’s globally

competitive environment, Japanese companies are increasingly

tapping external resources and taking a closer look at strategic

mergers and acquisitions (M&A).

Becoming World-Class
Global Investment Banking is building its position as Asia’s pre-

In 2007, there were about 3,000* M&A deals involving

eminent investment bank. We aim to be the investment bank of

Japanese companies, with a total value of US$153.9 billion*.

choice in Asia and an engine to drive revenue expansion at

There have been over 2,000 M&A deals a year between

Nomura Group.

Japanese companies since 2005, while acquisitions of foreign

companies by Japanese corporations have amounted to about

400. Moreover, in 2007 acquisitions of Japanese companies by

Leadership in Japan:
Maintaining a High Market Share

foreign corporations increased sharply to record levels in terms

Our strength lies in our dominant presence in Japan, backed by

of number and value.

our solid client base.

In view of the rapid growth in the Brazil, Russia, India, and

China (BRIC) markets and other emerging countries as well as

Equity Finance

the forecast for shrinking demand in Japan as a result of long-

In fiscal 2007, the overall value of equity market transactions in

term population decline, many Japanese companies are step-

Japan declined due to the slump in domestic equity markets.

ping up their global strategies. In particular, non-manufacturers

However, we acted as lead manager for a number of major

are expected to adopt a strategic focus on China as the coun-

issues, including the initial public offering (IPO) of Sony Financial

try’s service industries develop.

Holdings, a euroyen convertible bond issue for recapitalization by

M&A Deals in Japan

M&A between Japanese companies

Acquisitions, etc., of foreign companies by Japanese companies

Acquisitions, etc., of Japanese companies by foreign companies

(Number of deals)
3,000

2,500

2,000

1,500

1,000

500

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Nomura, based on data from RECOF.

Nomura Holdings, Inc.

Expansion

Hiromi Yamaji,
Chief Executive Officer,
Global Investment Banking

Yamada Denki, and a public offering by Daikin Industries. As a

result, Nomura ranked No. 1 in the “Japan Equity & Equity-

Related” league table* for the seventh consecutive year in fiscal

2007. In Europe, we have undergone a strategic buildup of our

operations and acted as global coordinator on Russia’s largest-

ever IPO, for PIK Group, a leading residential property developer.

M&A

Railway. Going forward, we will continue to market these

solutions and products more broadly while developing other

new products.

International Operations:
Asia’s Preeminent Investment Bank

To take our international operations to the next level, we are

increasing locally oriented businesses in each region and con-

During fiscal 2007, Global Investment Banking acted as finan-

tinuing to “Deliver Asia” by making our strengths in Asia, includ-

cial advisor on such deals as the sale of All Nippon Airways’

ing Japan, available to clients in Europe and the United States.

hotel business, the acquisition of all shares of Sanyo Shinpan

In Europe, we are increasing the use of our business platform

Finance by Promise, and the sale of Procter & Gamble’s

built up over the past couple of years and expanding our opera-

Attento business to Daio Paper. As a result, Nomura topped

tions into the Commonwealth of Independent States (CIS) and

Japan’s fiscal 2007 “Any Japanese Involvement Announced”

Eastern Europe. In the Americas, we are maintaining and strength-

league table*.

*Source: Thomson Reuters.

ening the functions and services of our global franchise. In Asia,

we are focusing on key areas and strengthening our operations in

India and China. We plan to raise the number of professional staff

Product Diversification and Development

members in our Asian operations from 90 to 130. Moreover, fol-

Global Investment Banking provided a number of new financial

lowing our practice in Japan and Europe, we are stationing sector

solutions during fiscal 2007, including the underwriting of an

bankers in Asia outside Japan and will expand the client coverage

issue of non-voting preferred shares for ITO EN, a convertible

of our global network by strengthening teamwork.

bond issue for recapitalization by Yamada Denki, and the secu-

ritization of earthquake risk (catastrophe bond) for East Japan

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League Tables

Equity Capital Markets Bookrunner League Table
Japan Equity & Equity-Related

M&A Financial Advisors League Table
Any Japanese Involvement Announced

Value base

April 1, 2007 to March 31, 2008

Rank

Bookrunner

Proceeds
(US$ mn)

Mkt.
Share

No.
of Deals

Rank

Advisor

Rank Value
(US$ mn)

Mkt.
Share

No.
of Deals

Nomura

JPMorgan

8,434.4

41.6%

2,300.8

11.3%

Daiwa Securities SMBC

2,204.6

10.9%

Nikko Citigroup

1,955.5

9.6%

Morgan Stanley

1,405.6

6.9%

Nomura

24,778.8

19.4%

Mitsubishi UFJ Financial Group

15,257.0

12.0%

JPMorgan

14,714.4

11.5%

138

112

Daiwa Securities SMBC

14,559.9

11.4%

119

Citigroup

14,063.1

11.0%

Source: Thomson Reuters.

Annual Report 2008

G l o b a l M e r c h a n t B a n k i n g

Leading Presence in Private Equity

Business Environment
Global Financial Market Turmoil,
Declining Equity Prices

Changing Management Mind-Set

Corporate managers in Japan are also changing their views. As

global competition becomes more intense, there is a growing

awareness that increasing corporate value is important for sur-

The operating environment in fiscal 2007 was characterized by

vival. An increasing number of managers are concluding that, if

turmoil in the global financial markets and a prolonged decline

their companies are to make effective use of their resources as

in equity markets. Although Global Merchant Banking reported

they focus on their core strengths, outside capital and human

a strong profit for the third consecutive year, the decline in equi-

resources should be considered as an alternative.

ty prices that began in the middle of fiscal 2007 had an impact

on our exit and new investment activities.

Strategic Delistings

Becoming World-Class
We are establishing a leading presence in private equity by

Japanese companies pursuing growth are starting to see

making full use of Nomura Group’s resources.

strategic delisting as a viable solution to address such manage-

ment issues as realigning and restructuring businesses and revi-

talizing operations. As investments by private equity funds

increase, the opportunities for unlisted companies to raise out-

side capital are growing.

Structuring the Right Portfolio

To realize our objective of generating annual income before

income taxes of ¥30–¥40 billion on a sustainable basis, we are

diversifying our portfolio of private equity investments, including

the exit timing.

Main Exits and Revenue

Net revenue

Income before income taxes

NFP Selected to Acquire Ashikaga Bank

YMC
Sale of stake
Deutsche Annington
Sale of stake
Sliontec
Sale of stake

(Billions of yen)
100

Deutsche Annington
Partial sale of stake
Tungaloy
Partial sale of stake

Wanbishi Archives
Partial sale of stake
Millennium Retailing
Sale of stake

-20

3/2003 3/2004 3/2005 3/2006 3/2007 3/2008

Nomura Holdings, Inc.

In March 2008, a consortium led by Nomura

Financial Partners (NFP) and Next Capital

Partners was selected to acquire Ashikaga

Bank. Nomura Group is committed to con-

tributing to the local communities where

Ashikaga Bank has its home base by support-

ing the bank’s growth and development as a

regional financial institution. The main focus

now will be on creating a more stable earnings

base, structuring and maintaining a sound

asset portfolio, and reinvesting in selected

areas to return to growth in preparation to

take the bank public.

Shoichi Nagamatsu,
Chief Executive Officer,
Global Merchant Banking

Over the next five years, we aim to build up a portfolio of

around 25 investee companies by investing in three to five

Japanese companies each year, with an investment horizon

ranging from three to five years, and with a target internal rate of

return of 20%. As of March 31, 2008, our business exposure

excluding Terra Firma* was about ¥210 billion. We aim to

increase this to ¥300 billion over the next few years to ensure

we are able to deliver stable profits, and we are looking to exit

Strategic Development Overseas

In May 2007, we established Asia Merchant Banking in Hong

Kong, which will draw on the extensive merchant banking expe-

rience of Nomura Group in Japan and Europe and leverage the

strength of the Nomura brand in Asia to identify promising,

growth-stage Asian companies and provide them with risk capi-

tal. Our main focus will be growth investments in companies in

the environment, consumer, and media related fields in China

the majority of our exposure through Terra Firma.

and India.

We are also engaged in venture capital activities in Japan,

Europe, and the United States. From our base in London, we

invest in biopharma, healthcare, and clean technologies compa-

nies, and we are creating funds in Europe to take advantage of

the special characteristics of this region.

The private equity market in Japan is becoming increasingly

competitive as private equity funds grow in size and become

more active. To differentiate ourselves in this competitive mar-

ket, we will tap the deep internal resources of Nomura Group

throughout the whole investment process. Drawing on our own

network will allow us to seek out new investment opportunities

without having to go through a competitive bid process, and to

provide a difference when boosting the value of investee com-

panies and exiting from investments.

*Terra Firma is an independent private equity firm based in Europe.

Major Investments and Exposure

Japan

Europe (Excluding Terra Firma)

Terra Firma

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Taiyo Electric
(Subsidiary of NEC)
Management buyout
Tungaloy
(Formerly Toshiba Tungaloy)
Management buyout
Sliontec
(Subsidiary of Hitachi)
Management buyout

YMC
Review of shareholder composition
Huis Ten Bosch
Revitalization sponsor
Millennium Retailing
Capital increase

Misawa Homes
Capital increase

Wanbishi Archives
Management buyout
Resort Solutions
(Formerly Misawa Resort)
Capital increase

Tsubaki Nakashima
Management buyout
Skylark
Management buyout
Mitsui Life Insurance
Capital increase
Eastern
Capital increase
Kawamura Electric
Review of shareholder composition

(Billions of yen)

600

500

400

300

200

100

3/2003

3/2004

3/2005

3/2006

3/2007

3/2008

Notes: 1. Exposure in Japan is the total for Nomura Principal Finance (NPF), Nomura Financial Partners (NFP), Nomura Research and Advisory (NR&A), and others.

2. Exposure in Europe (excluding Terra Firma) is the total for Private Equity Group (PEG) and Nomura Phase4 Ventures (NPV).

Annual Report 2008

A s s e t M a n a g e m e n t

World-Class Player with
Strong Investment Capabilities in Japan and

Business Environment

Continuing Flow of Funds into Investment Trusts
With the ongoing shift from savings to investment products in

Becoming World-Class
We have adopted a multiproduct, multichannel approach and

are developing our advisory services for Japanese investors by

Japan, the investment trust market is expanding rapidly on the

enhancing our expertise to deliver world-class investment capa-

back of increased demand for asset management services and

bilities. In addition, we are offering a broad spectrum of invest-

the opening up of new sales channels. Although total assets

ment products to leading institutional investors outside Japan

under management in investment trusts in the Japanese market

as we develop new sales channels. To facilitate these activities,

declined 4%, to ¥102 trillion, in the year to March 2008 due to a

we are aggressively investing in the necessary IT infrastructure

drop in global equity markets and an appreciating yen, publicly

and fostering a culture where our people can create new value.

offered investment trusts saw a net inflow of ¥11.6 trillion, mark-

Our aim is to be a world-class player with assets under man-

ing the third straight year of inflows above ¥10 trillion.

agement of ¥43 trillion* in three years.

*Total of ¥50 trillion for all Asset Management Division firms minus asset overlap.

Diversification of Sales Channels

Since the market for the sale of investment trusts in Japan was

Multiproduct, Multichannel Strategy

opened to financial institutions other than securities firms in

In the investment trust market for Japanese retail investors, we

1998, the range of investment trust sales channels has contin-

are further developing our multiproduct, multichannel approach

ued to expand, increasing the investor base. As of March 31,

and working to establish a dominant presence.

2008, the balance of net assets in domestic investment trusts

For some time now, we have focused on strengthening our

sold through banks was approximately ¥30 trillion. Of this total,

investment capabilities. These efforts were recognized when the

Japan Post Bank accounted for ¥1 trillion.

Nomura Global Six Assets Diversified Fund (Profit Distribution

Type) received the Morningstar Award “Fund of the Year 2007”

Best Awarded Fund in the Hybrid Fund Division. To build on this

Total Net Assets in Publicly Offered and
Privately Placed Investment Trusts by Sales Channel

Securities firms (publicly offered)
Japan Post Bank (publicly offered)

Banks, etc. (publicly offered)
Direct (publicly offered)

Privately placed

(Trillions of yen)
120

Total Assets under Management

(Trillions of yen)
30

100

3/2004

3/2005

3/2006

3/2007

3/2008

3/2004

3/2005

3/2006

3/2007

3/2008

Source: The Investment Trusts Association, Japan.

Nomura Holdings, Inc.

Notes: 1. Total assets under management of Nomura Asset Management, Nomura
Corporate Research and Asset Management, Nomura Funds Research
and Technologies, MAINTRUST KAG, Nomura Funds Research and
Technologies America, and Private Equity Funds Research and
Investments. Adjusted for asset overlap among Group companies. Data to
March 31, 2006, includes Nomura BlackRock Asset Management.

2. Nomura Funds Research and Technologies America data as of the end of

February 2008.

Atsushi Yoshikawa,
Chief Executive Officer,
Asset Management

Asia

momentum, we remain focused on offering world-class invest-

ment capabilities to our clients.

Multiproduct Strategy

Nomura Asset Management has set a goal of establishing its

brand as the largest originator of exchange-traded funds (ETFs)

in Japan. In October 2007, we introduced Next Funds, a unified

brand for our ETFs, which had grown to 26 funds as of March

31, 2008.

Private Equity Funds Research and Investments (PEFR&I)

commenced operations in February 2008 to manage and evalu-

ate private equity funds and has added private equity vehicles

to our investment product lineup.

Multichannel Strategy

As part of our multichannel strategy, we are working to ensure

we are able to respond with speed to provide products and

services that meet the specific needs of each channel. In the

bank sales channel, we hold seminars and run advertisements

to support the sales strategies of individual banks and we are

working to raise the profile of the Nomura brand.

International Initiatives: Enhancing
Capabilities, Expanding Distribution Channels

Internationally, we are expanding our asset management busi-

ness across Asia. In view of the increasing global demand for

portfolio management services for Asian equities, we are

increasing the number of portfolio managers and related per-

sonnel and bolstering our investment management structure for

Asian equities. In Korea and Taiwan, we are also selling invest-

ment trusts that invest in Japanese stocks and other investment

instruments through local distribution channels. Looking ahead,

we plan to extend our investment trust distribution channels to

other countries in Asia.

In the investment advisory business, demand among over-

seas investors for our fund management services is strong. In

addition to our extensive experience in managing Japanese

equities, we are also continuing to receive further mandates

from major overseas institutional investors for the management

of non-Japanese Asian equities. This is another area where we

aim to be a world-class player in the supply of Japanese and

Asian equity products and other financial instruments.

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Award-Winning Funds

O “R&I Fund Award 2008”:

First Prize for a Japanese REIT Fund in the Investment Trusts Category

O “R&I Fund Award 2008”:

2008

Award for a Global Bond Fund in the Defined Benefit Pension Category

O “Lipper Fund Awards Japan 2008”:

First Prize among 14 Entries in the Investment Trusts Category

O Morningstar Award “Fund of the Year 2007”:

Morningstar Best Awarded Fund in the Hybrid Fund Division

O “Fifth Annual Mercer MPA (Japan) Awards”: Comprehensive Division Award for Foreign Bonds
O “R&I Fund Award 2007”:

First Prize for Japanese Mid and Small Caps Equity Fund in the Investment Trusts Category

2007

O “R&I Fund Award 2007”:

First Prize for a Global Equity Fund in the Investment Trusts Category

O “R&I Fund Award 2007”:

First Prize for an Asia-Oceania Equity Fund in the Investment Trusts Category

O “R&I Fund Award 2007”:

First Prize in the Japanese Bond Fund Defined Contribution Pension Category

O “R&I Fund Award 2007”:

Second Prize in the Japanese Bond Fund Defined Contribution Pension Category

O “Lipper Fund Awards Japan 2007”:

First Prize among Four Entries in the Investment Trusts Category

O Morningstar Award “Fund of the Year 2006”:

Morningstar Best Awarded Fund in the International Stock Fund Division

O Morningstar Award “Fund of the Year 2006”:

Morningstar Awarded Fund in the Domestic Stock Fund Division

O Morningstar Award “Fund of the Year 2006”: Morningstar Awarded Fund in the Hybrid Fund Division

J-REIT Open

International Bond Active

Nomura Global Six Assets Diversified Fund
(Profit Distribution Type)

International Bond Active
Small Capitalization Blue Chip Open

Global High Income Stock Fund

Nomura China Stock Fund Course B

NOMURA Japan Bond Fund DC

NOMURA Japan Bond Open DC

Global High Income Stock Fund

Nomura Japan Open

Global Three Assets Balance Fund
(Monthly Distribution) (“Session”)

Annual Report 2008

Global Research

Our Global Research operations are charged with keeping a close watch on changing economic,
industrial, and corporate trends around the world and developing timely investment ideas for clients.
Our strength lies in the research and analytical expertise we have accumulated since our founding
and the extensive databases that support this. In addition to providing information to help clients

History of Nomura Research
Research is part of Nomura’s DNA. Our founder, Tokushichi

into a separate company, Nomura Research Institute (NRI), thus

following the precedent established by U.S. companies in setting

up think tanks. Subsequently, Nomura reviewed its research

Nomura II, realized the importance of scientific research early on.

activities and in April 1997 securities research functions were

He formed a research department in Nomura Shoten, the prede-

assigned to the Nomura Securities Financial Research Center.

cessor company to Nomura Securities, in 1906, and started pub-

The center has marked its 10th anniversary and undergone a

lishing the Osaka Nomura Business News, which later became

number of organizational changes. At present, the center con-

the Weekend Report and is now known as the Nomura Weekly

sists of two research divisions: the Financial & Economic

Report.

Research Center, which conducts fundamental research, and the

When Nomura Securities was founded in 1925, it formed a

Quantitative Research Department.

research department from the outset. In 1926, the research

Additionally, Nomura Research & Advisory was established in

department began the publication of Capital Market Research,

February 2000 to conduct research on unlisted companies. In

which later became Capital Market Visions, to communicate the

April 2004, the Nomura Institute of Capital Markets Research was

results of its research in Japan and overseas.

launched as a think tank independent of Nomura Group’s

One of the milestones in research during the postwar period

research organization to conduct practical research and make

was the splitting off of Nomura’s research department in 1965

proposals for public policy.

Financial & Economic Research
Center Marks 10th Anniversary

Nomura’s Financial & Economic Research Center
celebrated its 10th anniversary last year with the
publication of three books, as discussed below.
Also, on March 15, 2008, the center held a 10th
anniversary seminar entitled, “China Money Moves
the World—Japan Seeks to Sustain Its Economic
Vitality.”

The Era of China Money
While China continues to experience remarkable

development, it is also wrestling with a number

of problems such as environmental issues, gaps

in income levels, regional disparities, and a

growing external imbalance. To deal with its

external imbalance, the Chinese government is
relaxing restrictions on overseas travel and out-
ward investment. At the same time, the pres-
ence of “China money” is growing. Where will China go from here? Why

have the prices of Chinese equities risen so sharply? This publication
examines current conditions in China as the country seeks to attain sus-
tainable growth while confronting the major issues it must address.

The Japanese Economy—
Conditions for Sustaining Vitality
Japan is said to be in a “Goldilocks economy,” charac-
terized by low inflation, low interest rates, and econom-
ic expansion without signs of overheating. As the

Japanese population declines, Japan is aiming to cre-

ate a new economic structure, but where will it go from

here? How can Japan’s manufacturers compete in an

increasingly global world, and what lies ahead for non-

manufacturing industries as they confront weakening domestic demand? Unless

the government and household sectors respond to ongoing changes, they may not

be able to overcome the challenges of population decline. This publication focuses

on the corporate dynamism in both the manufacturing and nonmanufacturing

industries and gives specific examples of Japan’s evolving economy.

Learning from Cutting-Edge
Financial Engineering—
Strategies for Asset Management
Financial engineering has made substantial progress

in many areas over the past 10 years. Nomura’s

Quantitative Research Department conducts R&D

activities aimed at applying these new developments

to practical operations. This publication selects 11
fields within financial engineering and presents expla-
nations by financial professionals of the latest research results. These include

the age-old but always topical issue of whether returns from equity investments

can be forecast as well as the diverse range of financial derivatives, investment

styles, and methods for individual investors to manage their assets.

Nomura Holdings, Inc.

make asset management decisions, we work to enhance our financial technologies by developing
systems that take full advantage of financial engineering techniques.

Global Research Structure
Nomura’s Global Research team includes approximately 520

Moreover, we are building up our research team in London that

covers emerging markets, an area of increasing interest to

investors.

members, about 340 in Japan and 180 in international offices. The

In quantitative research, the Quantitative Research Department

research structure in Japan includes the Financial & Economic

acts as the focal point and works closely with offices in New York,

Research Center, the Quantitative Research Department, the

London, and Hong Kong. Principal activities include drawing on

Global Research Planning & Support Department, and Nomura

the core skills of financial engineering and IT to conduct R&D in a

Research & Advisory. In addition, Nomura has researchers across

broad range of areas, including asset management, trading, prod-

Asia, in the United Kingdom, and in the United States.

uct development, risk management, and financial management.

In the fundamental research field, the Financial & Economic

Global Research teams in Japan and overseas work together

Research Center has more than 100 professionals in Japan,

closely to follow developments in economies and capital markets,

including economists, strategists, and analysts. They collaborate

prepare forecasts of future trends, and distribute information

with colleagues in our offices in the rest of Asia, Europe, and the

proactively through reports and seminars. We remain dedicated to

United States to analyze economies, stock markets, industries,

providing information that helps our clients enhance their invest-

companies, and related issues. In view of Nomura’s strategic focus

ment performance.

on Asia, we are enhancing our research capabilities in that region.

Analyst Ranking (2008) by The Nikkei Veritas

All-Japan Research Team (2008) by Institutional Investor

Rank

Firm Name

Nomura Securities

Daiwa Institute of Research

UBS

Mitsubishi UFJ Securities

Nikko Citigroup

JPMorgan Securities Japan

Credit Suisse

Goldman Sachs Japan

Mizuho Securities

Morgan Stanley Japan Securities

Points

13,573

12,532

9,444

9,021

7,657

6,590

6,569

5,820

5,290

4,165

Rank

Firm Name

Total Team Position

Nomura Securities

Daiwa Institute of Research

UBS

JPMorgan Securities Japan

Goldman Sachs Japan

Morgan Stanley Japan Securities

Credit Suisse

Merrill Lynch Japan Securities

Mitsubishi UFJ Securities

Nikko Citigroup

P Key Topics in Fiscal 2007
The Economic Research Department of Nomura’s Financial &

In addition, the Quantitative Research Department develops

and offers indexes to provide benchmarks for the manage-

Economic Research Center has developed an original indica-

ment of various types of securities in Japan and overseas

tor, the Nomura Regional Economic Index (NMRI). This index

markets. On October 23, 2007, an exchange-traded fund

consists of a coincident indicator that reflects trends in region-

(ETF) linked to one of those indexes, the Russell/Nomura

al economies and a leading indicator that shows the future

Small Cap Core Index, was listed on the Osaka Securities

direction of economic conditions, thus making it possible to
confirm the current situation in regional economies and future

Exchange. This ETF is one of the Next Funds, a series of next-
generation funds being developed by Nomura Asset

directions at a glance. These indicators are revised on a

Management. It is the first ETF in Japan linked to small-cap

monthly basis and are expected to be extremely useful as

stocks.

they provide a faster and surer way to understand trends in

regional economies.

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Annual Report 2008

Corporate Governance and Internal Control System

Basic Stance

Nomura Holdings aims for transparency in all its opera-

governance and corporate social responsibility (CSR) that

tions and strives to ensure the quick, responsive man-

all Nomura Group executives and employees should be in

agement of Nomura Group as a whole. While working to

compliance with in order to fulfill their responsibilities to

enhance the corporate value of the Group in the medium

Nomura Holdings shareholders and all other stakeholders.

to long term, we are fully aware that strengthening corpo-

During the fiscal year under review, we sincerely regret

rate governance is of the highest priority and accordingly

to report that a former employee of our subsidiary Nomura

implement initiatives to strengthen and improve our gov-

Securities was found to have engaged in insider trading.

ernance systems.

We wish to express our apologies for the concern and

Among these initiatives, we are actively implementing

inconvenience this has caused our customers and other

reforms to ensure management transparency. When the

stakeholders.

Group made the transition to a holding company struc-

Following the arrest of this former employee in April

ture in October 2001, we appointed outside members to

2008, Nomura Securities formed a special investigation

our Board of Directors with the objective of strengthening

committee composed of independent, outside members

management oversight functions. Nomura Holdings also

to provide their assessment and recommendations

formed an Internal Controls Committee in which an out-

regarding this issue. Based on their recommendations, to

side director also participates, created a Compensation

prevent a recurrence of similar incidents in the future, we

Committee with a majority of outside directors, and

are devoting our fullest efforts to strengthening our infor-

formed an Advisory Board composed of prominent per-

mation management policies and procedures as well as to

sons. When we listed our shares on the New York Stock

making improvements in the content of our personnel

Exchange in December 2001, we further expanded our

management and training activities. In July 2008, we

information disclosure to increase the transparency of our

received an order, which was not related to any legal vio-

management systems and activities. In June 2003, we

lations, from Japan’s Financial Services Agency (FSA) to

adopted the Committee System corporate governance

implement business reforms in areas where the FSA saw

model and separated the management oversight func-

certain inadequacies in our operations. In response, we

tions from the day-to-day execution of business activities.

have submitted a report on corrective measures we will

We also focused governance on the Nomination,

implement, and it has been accepted by the FSA.

Audit, and Compensation committees, thereby substan-

As our business operations have become increasingly

tially strengthening management oversight functions and

diverse and global in scope and have come to require dif-

increasing transparency.

ferent types of employment relationships as well as a

Along with this, the Group’s executive officers were

greater diversity in personnel, we are acutely aware that

delegated substantially greater authority for conducting

strengthening our compliance systems has become an

operations and they have subsequently executed busi-

increasingly important issue. We are committed to creating

ness activities quickly and responsively from a consolidat-

top-class internal control systems, even by international

ed perspective.

standards, by placing maximum emphasis on the obser-

Moreover, in 2004, we drew up the Code of Ethics of

vance of rules and regulations and making improvements in

Nomura Group, which specifies issues related to corporate

our education and training programs for workplace ethics.

Corporate Governance (Nomura Holdings)

Business Execution, Audit/Oversight,

operations to the executive officers, allowing executive

Nomination, and Compensation Decision Making

officers to carry out business activities flexibly.

Since Nomura Holdings adopted the Committee System

We are working to strengthen and expand our internal

of corporate governance, the Board of Directors has del-

control systems to ensure the proper conduct of corpo-

egated substantial authority for the execution of business

rate activities throughout the Group, with the aims of

Nomura Holdings, Inc.

securing transparency and efficiency in management,

p Audit Committee

ensuring compliance with laws and regulations, manag-

ing risk properly, securing the reliability of business and

financial reporting, and promoting timely and appropriate

information disclosure.

P Three Committees

The Nomination Committee, Audit Committee, and

Compensation Committee have been given the authority

to make decisions on issues including candidates for the

The Audit Committee is composed of a majority of out-

side directors and is responsible for auditing the busi-

ness execution of the directors and executive officers

and preparing audit reports. It also makes decisions

regarding proposals to be submitted to the Ordinary

General Meeting of Shareholders concerning the

appointment and dismissal of independent auditors. No

directors who are representative executive officers,

including the CEO, or executive officers are members of

Board of Directors, audits concerning the business exe-

the Audit Committee.

cution of directors and executive officers, and compen-

sation for directors and executive officers, respectively.

p Compensation Committee

As such, management oversight is conducted by the

Board of Directors.

p Nomination Committee

The Nomination Committee is composed of a majority of

outside directors and is responsible for decisions regard-

ing proposals made to the Ordinary General Meeting of

Shareholders concerning the appointment and dismissal

of directors. No directors who are representative execu-

tive officers, including the CEO, or executive officers are

members of the Nomination Committee.

The Compensation Committee is composed of a majority

of outside directors. This committee decides on policy for

decision making regarding the content of compensation

and related matters for directors and executive officers,

and makes decisions on the specific content of compen-

sation and related matters for individual directors and

executive officers. No directors who are representative

executive officers, including the CEO, or executive offi-

cers are members of the Compensation Committee.

Management Structure

Shareholders’ Meeting

Board of Directors

(11*)

President & CEO

Nomination Committee
(2*)

Audit Committee
(23*)

Compensation Committee
(3*)

Group Management
Committee

Risk Management
Committee

Risk Management
Sub Committee

Internal Controls
Committee

Office of Audit Committee

*Number of meetings held in fiscal 2007

Advisory Board

PAdvises the Group

Management Committee

PMembers are prominent

businesspeople

Annual Report 2008

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Corporate Governance and Internal Control System

Business Execution System

Nomura has formed a Group Management Committee,

Management Committee is responsible for deliberating

Risk Management Committee, and Internal Controls

and deciding on important risk management issues for

Committee to ensure that executive officers make busi-

Nomura Group, such as the Group’s response to require-

ness decisions smoothly and in an appropriate manner.

ments under Basel II. The Risk Management Sub

Group Management Committee

Management Committee to make assessments and deci-

Chaired by the CEO, the Group Management Committee

sions regarding positions and important risk management

Committee has been established under the Risk

includes the COO, the business division CEOs, and other

issues.

person(s) designated by the CEO. The Group

Management Committee is responsible for deliberating

Internal Controls Committee

and making decisions related to important management

The Internal Controls Committee is chaired by the CEO

issues for Nomura Group, such as management strate-

and is comprised of person(s) designated by the CEO,

gies, business plans, and budgets as well as the allocation

Audit Committee member(s) designated by the Audit

of management resources.

Committee, and Director(s) (Audit Mission Director(s))

designated by the Board of Directors. The Internal

Risk Management Committee

Controls Committee is responsible for establishing and

The Risk Management Committee is chaired by the CEO

evaluating internal controls concerning Nomura Group

and includes the COO, the business division CEOs, and

operations as well as for deliberations and decisions to

other person(s) designated by the CEO. Under the dele-

promote proper corporate behavior.

gation of the Group Management Committee, the Risk

Internal Controls

Nomura Holdings adopts a range of measures to ensure

Crisis Management

that decision making related to the conduct of opera-

To minimize the impact of natural disasters, fires, and

tions by the executive officers proceeds smoothly and

other crises, both in Japan and overseas, and return to

appropriately.

Fair Disclosure

normal operations as quickly as possible following such

incidents, Nomura Group has established the Nomura

Group Crisis Management Policy. In addition, the

To ensure investors have fair access to information

Nomura Group Crisis Management Committee is respon-

regarding Nomura Group, we have established Nomura

sible for Groupwide crisis management plans and action

Group’s Statement of Global Corporate Policy

programs.

Regarding Public Disclosure of Information. The

Disclosure Committee deliberates and makes decisions

Information Security

regarding appropriate ways of disclosing material infor-

Nomura Group has established an Information Security

mation related to Nomura Group, preparation of legally

Policy in relation to client information to ensure that such

mandated disclosure documents, and important items

information is strictly protected and managed. Nomura

related to the disclosure of corporate information based

Securities has also prepared internal regulations that

on this statement.

include Regulations Regarding Insider Trading to strictly

manage information related to corporate clients.

Nomura Holdings, Inc.

Compliance

Risk Management

Nomura Group works to prevent behavior that may give

To provide for comprehensive control, monitoring, and

rise to the suspicion of violations of legal regulations. The

reporting on the various types of risks inherent in the

following measures have been taken to ensure that all

activities of Nomura Group, the following measures have

related information is promptly communicated to man-

been implemented.

agement without exception, should such issues arise.

P Top management actively committed to risk

P Appointment of a Group Compliance Officer

management

P Appointment of Compliance Officers

P Establishment of overall control of risk management

P Provision of a compliance hotline

P Addressing legal risk globally

through the formation of a Risk Management

Committee and Risk Management Sub Committee

P Management by globally linked risk management

departments and risk management at operating level

Note: For details regarding internal controls in the conduct of business operations, please refer to Corporate Governance in the Investor Relations section of www.nomura.com.

Compensation for Directors and
Executive Officers
Nomura Holdings has two basic compensation policies

(1) Base Salary

for directors and executive officers: (1) in line with the

The base salary of each director and executive officer is

attainment of management objectives, to set compensa-

the sum of amounts based on each individual’s career,

tion levels flexibly to significantly raise management moti-

posts held to date, responsibilities, and the degree of

vation and empower individuals to realize their maximum

attainment of the target return on equity (ROE) on a con-

potential and (2) to introduce compensation linked to the

solidated basis.

value of the Company’s stock to enhance long-term

incentives. The total amount of compensation paid to

(2) Cash Bonus

directors and executive officers for the fiscal year ended

The cash bonus is based on quantitative factors such as

March 31, 2008, was ¥1,643 million. The compensation

consolidated net income, ROE, and the earnings of busi-

of directors and executive officers is composed of a

ness divisions. This bonus is also based on qualitative

base salary, cash bonus, and stock bonus.

items, such as the degree of attainment of management

Position

Number1

Compensation

As of March 31, 2008

Directors
(Outside directors)

Executive Officers

Total

8
(4)

¥445 million
(¥131 million)

¥1,198 million

targets and personal targets, assessments of individual

contributions, and other factors. The aggregate cash

bonuses of directors and executive officers may not

exceed 1% of consolidated net income.

(3) Stock Bonus

¥1,643 million2, 3, 4

The stock bonus is determined separately for each indi-

1. As of March 2008, there were 11 directors and 13 executive officers. Of this total,
three persons held positions as directors and executive officers concurrently.
Compensation of the persons holding offices of director and executive officer con-
currently is included in the compensation figure for executive officers.

2. The figure of ¥1,643 million includes ¥534 million in compensation paid in the form
of stock options (stock-related compensation). (A total of 21 persons received com-
pensation in the form of stock options.)

3. The figure of ¥1,643 million includes ¥2 million in compensation paid in a non-

monetary form.

4. The figure of ¥1,643 million includes ¥213 million paid as retirement allowances (to
two persons), as approved by a vote at the 98th Ordinary General Meeting of
Shareholders (held on June 26, 2002).

vidual by taking into consideration all applicable factors.

These include parameters such as consolidated net

income and ROE as well as the level of this compensa-

tion relative to the base salary, cash bonus, and other

stock bonuses and the benefits relative to the cost of

providing such compensation.

Annual Report 2008

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Corporate Governance and Internal Control System

Board of Directors

Title

Name

Responsibilities and Status in Other Companies

Chairman of
the Board

Junichi Ujiie

Director

Kenichi Watanabe

President & Chief Executive Officer

Director

Takumi Shibata

Deputy President & Chief Operating Officer

Director

Masaharu Shibata

Chairman of NGK Insulators, Ltd.
Chairman of NGK Technica, Ltd.
Statutory Auditor of Chubu-Nippon Broadcasting Co., Ltd.

Director

Hideaki Kubori

Chairman of Hibiya Park Law Offices
Statutory Auditor of SOURCENEXT CORPORATION

Director

Haruo Tsuji

Corporate Advisor of Sharp Corporation
Outside Director of Kobayashi Pharmaceutical Co., Ltd.

Director

Fumihide Nomura

President of Nomura Shokusan Co., Ltd.

Director

Tsuguoki Fujinuma

Advisor of The Japanese Institute of Certified Public Accountants
Director of Tokyo Stock Exchange Group, Inc.
Governor of Tokyo Stock Exchange Regulation
External Corporate Auditor of Sumitomo Corporation
External Auditor of Takeda Pharmaceutical Company Limited
Outside Director of Sumitomo Life Insurance Company

Director

Masahiro Sakane

Chairman of the Board of Komatsu Ltd.
External Corporate Director of Tokyo Electron Limited

Director

Masanori Itatani

Director

Yoshifumi Kawabata

Note: A double circle indicates the committee chair.

(As of July 1, 2008)

Nomination
Committee

Audit
Committee

Compensation
Committee

Audit Mission
Director

From left: [Back row] Masanori Itatani, Junichi Ujiie, Kenichi Watanabe, Takumi Shibata, Yoshifumi Kawabata
From left: [Front row] Tsuguoki Fujinuma, Fumihide Nomura, Haruo Tsuji, Masaharu Shibata, Masahiro Sakane, Hideaki Kubori

Nomura Holdings, Inc.

Executive Officers and Business Division CEOs

Executive Officers (As of July 1, 2008)

Title

Name

Main Responsibilities

President

Kenichi Watanabe

Chief Executive Officer

Deputy President

Takumi Shibata

Chief Operating Officer

Executive Managing Director

Akihiko Nakamura

Chief Information Officer

Executive Managing Director

Toshio Hirota

Head of Communications

Executive Managing Director

Hideyuki Takahashi

Head of Internal Audit

Executive Managing Director

Yugo Ishida

Head of Regional Management, Europe

Senior Managing Director

Akihito Watanabe

Head of Group Human Resources Development

Senior Managing Director

Shigesuke Kashiwagi

Head of Regional Management, Americas

Senior Managing Director

Masafumi Nakada

Chief Financial Officer

Senior Managing Director

Noriaki Nagai

Head of Corporate Office

Senior Managing Director

Yoshinori Go

Yuji Nakata

Head of Regional Management, Asia

Global Markets (Based in Europe)

Senior Managing Director

Yoshihiro Fukuta

Head of Regional Management, Asia

Business Division CEOs (As of July 1, 2008)

Responsibility

Domestic Retail

Global Markets

Global Investment Banking

Global Merchant Banking

Asset Management

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Name

Hitoshi Tada

Akira Maruyama

Hiromi Yamaji

Shoichi Nagamatsu

Atsushi Yoshikawa

Annual Report 2008

Corporate Social Responsibility

Our Commitment to the Environment
Nomura Group is committed to reducing the environ-
mental impact of the Group as a whole and contributing
to resolving environmental challenges through our inno-
vative financial services. With this in mind, we focus our
efforts on the following priority areas: promoting environ-
mental conservation activities, disclosing environmental
information, and proactively working to resolve environ-
mental issues. In addition to these efforts, Nomura
Group is actively involved in solving environmental prob-
lems by investing its own capital in environment-related
companies.

Reducing the Environmental Impact
of the Group as a Whole

P Environmental Activities Working Group
P Purchasing Green Power Certificates
P Nihonbashi headquarters wins the highest

evaluation, “AAA,” from the City of Tokyo

P Reducing paper consumption
P Nomura International plc receives ISO 14001

certification

Fiscal 2007 Objectives and Results

Programs

Global warming
prevention

Promotion of
green purchasing

Policies
Reduce greenhouse gas emissions
at Nihonbashi headquarters
Study how to reduce domestic office
energy consumption
Increase “green” procurement ratio

Track results for all domestic
offices
75% “green” procurement

Establish Group guidelines

Policy-making/staff training

Waste manage-
ment/reduction
Management
systems

Promote recycling
Promote paper recycling
Strengthen Group promotion system,
Group environmental training

Recycle 90% of waste
Recycle ratio of 98%
Build global network of Group
offices and companies

Efforts to Solve Environmental
Issues through Investment

P Investing our own capital in environment-related

companies

O Regarding environmental and new energy fields as
growth areas, supporting unlisted companies in their
path towards initial public offerings and investing in
cutting-edge environment-related companies

O Clean technology venture funding from a global point

of view

P Providing environment-related research and infor-

mation to investors

O Launching the NOMURA ECOLOGY FOCUS project to
enhance our environmental conservation efforts by
providing investors with additional research on indus-
tries and technologies that contribute to the protection
of the earth’s environment

O Holding the Nomura Global Environment

LOG Y F O C

U S

Technology Conference

P Providing environment-related funds
O Nomura Aqua Investment
O Global Umbrella - UBS (JP) Global Warming Ecology
O World Water Fund

Targets

Fiscal 2007 Results

Comments

20% reduction vs. FY2001

28% reduction vs. FY2001

Seek further cuts

Energy consumption for all balances was estimated
on the basis of a survey of a sample of branches
61% (55.8% in FY2006)
Formulation of specialized guidelines for green
purchasing of IT equipment
92.6% (93.6% in FY2006) Nihonbashi HQ
94.8% (98.5% in FY2006) Nihonbashi HQ
Environmental awareness-raising through our
intranet

Studying measures to cut energy
consumption at all branches
Continued training of purchasing officers

Studying ways to incorporate within Group

Continuing to promote
Continuing to promote
Continuing initiatives to raise employee
awareness

* The recycling rate was lower than the previous year largely because the volume of waste produced was reduced significantly, down 10.3% from FY2006.
* Initiatives to achieve 2008 targets to focus on the FY2007 goals not achieved.

Relationship with Society
With “Investing for the future—Contributing to a brighter
tomorrow” as Nomura Group’s philosophy concerning
contributing to society, we aim to support the economy,
arts, and academia through our business activities. We
focus on the three important areas of: (1) the spread of
financial and economic education, (2) promoting
exchange and dialog with local communities, and
(3) socially minded business activities.

Support for Culture, the Arts, and Academia

P Financial and economic education
O Providing a broad
range of opportuni-
ties for financial and
economic education

Nomura Holdings, Inc.

In March 2008, with guidance from Professor Sawa, we
produced The Economics Classroom as a supplemen-
tary text for students in the latter years of elementary
school. This text was positioned as a lead-in to the pre-
viously released T-Shirt Shop.
P Support for culture and the arts
O Nomura Group and the Nomura Cultural Foundation
support the Pacific Music Festival as one of the festi-
val’s special corporate supporters since its inception in
1990.

P Community involvement initiatives
O Nomura Group undertakes various initiatives to meet
its responsibilities as a good corporate citizen in each
of the communities to which it belongs.

Contributing to the Development
of Society through Investment

P Providing financial solutions in the healthcare field
O Supporting a management improvement program for
hospitals and nursing homes, arranging and investing
in financing solutions

P Providing Nomura Group’s SRI funds
O Nomura Global SRI 100, popularly known as Nomura

Global Social Responsibility Investment

O Morningstar SRI Index Open, popularly known as

Tsunagari

O Nomura Global SRI Index Fund DC (for defined contri-

O Investing in life-science-related companies and

bution pension plans)

cutting-edge medical companies

Relationship with Customers
Nomura Group is committed to engaging in business in
a manner that meets the needs of its clients, and strives
to be recognized as an asset to society by satisfying the
expectations of a broad spectrum of customers. In
recognition of their importance, we focus on promoting
client-oriented management, eliminating information
asymmetry, and responding to the diverse needs of mar-
kets and customers.

Initiatives to Improve Customer Satisfaction

O Initiatives to address the enforcement of the Financial

Instruments and Exchange Law

The Financial Instruments and Exchange Law and asso-
ciated ordinances (new law and ordinances) came into
effect on September 30, 2007. In addition to creating an
internal structure to ensure compliance with the new law
and ordinances, we have initiated measures so that our
clients will also understand the new requirements.

Relations with Our Employees

Training to Realize Full Potential

Allowing our employees to reach their full potential is at
the core of Nomura Group’s personnel system. Nomura
Group treats its employees as individuals and provides a
variety of opportunities for employees with ability and
desire, regardless of gender or age. Employees who
perform to their potential are compensated accordingly.
This aims to give all employees greater responsibility for
their work and provide the incentive for them to perform
to their full potential. We believe this also adds vitality to
the Company as a whole.
O Retiree rehiring system
O Providing training and development program

Securing Diverse Human Resources and
a Work-Friendly Environment

Nomura Securities actively recruits and promotes
women. We have women-only branch offices and

Providing Products and Information to Clients
(Eliminating Information Asymmetry)

We analyze the financial products we offer with due care
and provide our clients with accurate information and
easy-to-understand advice. These measures demon-
strate our commitment to offering services fit for a
responsible financial institution in originating products,
providing information, and soliciting business.

Nomura Securities is establishing completely new
types of branches that are not held back by conventional
concepts. Through these new branches, such as virtual
branches, we invite people to enjoy learning about
investment trends and how investing works.
O Established an information hub, Nomura Cube, within

Second Life®

O Opening joint branch
with St-Marc Café
O Opening branches in

medical centers

Virtual branch

departments and have established a section to plan and
formulate career development policies for our female
employees. We also have guidelines for actively recruit-
ing the elderly, persons with disabilities, and non-
Japanese people in Japan.
O Happy Career & Life project
O Mental health care
O Child care and family nursing care support
O Work/life initiatives

Diversity and Human Rights (in Japan)

People (employees) are Nomura Group’s most important
asset. Increasing human rights awareness in order to
maintain respect for human rights and prevent discrimi-
nation and harassment is a top priority.
O In-house human rights training programs

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Annual Report 2008

Seven-Year Financial Summary (U.S. GAAP)
For the fiscal years beginning April 1 and ending March 31 of the following year
Note: This financial summary is prepared solely for convenience. Readers are recommended to refer to the Form 20-F.

Operating Results:

Revenue:

Commissions
Fees from investment banking
Asset management and portfolio service fees
Net gain on trading
Gain (loss) on private equity investments
Interest and dividends
Gain (loss) on investments in equity securities
Gain from changes in equity of an affiliated company
PFG entities product sales
PFG entities rental income
Gain on sales of PFG entities
Private equity entities product sales
Other

Total revenue
Interest expense

Net revenue

Non-interest expenses:

Compensation and benefits
Commissions and floor brokerage
Information processing and communications
Occupancy and related depreciation
Business development expenses
PFG entities cost of goods sold
PFG entities expenses associated with rental income
Private equity entities cost of goods sold
Other

Total non-interest expenses

Income (loss) from continuing operations before income taxes and cumulative effect of accounting change

Income from discontinued operations before income taxes and cumulative effect of accounting change

Income tax expense

Income (loss) from continuing operations before cumulative effect of accounting change

Gain on discontinued operations

Cumulative effect of accounting change

Net income (loss)

Balance Sheets (Period End):

Cash and cash deposits
Loans and receivables
Collateralized agreements
Trading assets and private equity investments
Other assets

Total assets

Short-term borrowings
Payables and deposits
Collateralized financing
Trading liabilities
Other liabilities
Long-term borrowings

Total liabilities

Total shareholders’ equity

Total liabilities and shareholders’ equity

Cash Flows:

Net cash provided by (used in) operating activities from continuing operations
Net cash provided by (used in) investing activities from continuing operations
Net cash provided by (used in) financing activities from continuing operations
Effect of initial adoption of SOP 07-1 on cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Discontinued operations, net

Net increase (decrease) in cash and cash equivalents

3/2002

3/2003

140,001
75,255
109,985
162,228
232,472
500,541
(55,860)
3,504
294,931
177,053
116,324
—
68,965

1,825,399
504,048

1,321,351

379,540
20,962
87,252
73,787
26,652
200,871
111,529
—
247,786

1,148,379

172,972

—

4,926

168,046

—

141,640
81,847
79,290
172,308
(14,391)
368,656
(41,288)
—
—
—
—
6,229
13,360

807,651
241,377

566,274

244,167
20,844
77,389
57,152
24,361
—
—
4,968
89,984

518,865

47,409

—

37,295

10,114

—

109,799

168,046

119,913

775,734
1,046,014
6,680,001
7,841,533
1,414,991

¥ 17,758,273
629,279
1,251,592
9,087,597
2,693,746
518,156
1,972,974

16,153,344

1,604,929

¥ 17,758,273

¥ (1,170,028)
(42,882)
1,052,851
—
13,018
—

(147,041)

955,509
1,137,265
8,603,170
9,286,507
1,186,995

¥21,169,446
343,837
¥
821,659
11,791,833
3,888,720
411,699
2,269,370

19,527,118

1,642,328

¥21,169,446

133,892
120,851
(111,189)
—
(8,952)
—

134,602

*Calculated using the yen-dollar exchange rate of U.S.$1.00=¥99.85, the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal

Nomura Holdings, Inc.

3/2004

3/2005

3/2006

3/2007

210,216
86,994
66,193
229,042
13,138
343,260
55,888
—
—
—
—
17,640
23,565

1,045,936
242,833

803,103

259,336
19,169
80,031
54,221
23,100
—
—
11,852
72,718

520,427

282,676

—

110,347

172,329

—

221,963
92,322
78,452
201,686
7,744
401,379
15,314
—
—
—
—
75,061
32,316

1,126,237
327,047

799,190

274,988
23,910
81,408
53,534
28,214
—
—
44,681
87,620

594,355

204,835

—

110,103

94,732

—

356,325
108,819
102,667
304,223
12,328
693,813
67,702
—
—
—
—
88,210
58,753

1,792,840
647,190

1,145,650

325,431
32,931
89,600
55,049
32,790
—
—
48,802
115,447

700,050

445,600

99,413

240,685

256,628

47,700

—

337,458
99,276
145,977
290,008
47,590
981,344
(20,103)
—
—
—
—
100,126
67,425

2,049,101
958,000

1,091,101

345,936
50,812
109,987
61,279
38,106
—
—
57,184
106,039

769,343

321,758

—

145,930

175,828

—

Millions of yen

3/2008

404,659
85,096
189,712
61,720
76,505
796,540
(48,695)
—
—
—
—
—
28,185

1,593,722
806,465

787,257

366,805
90,192
135,004
64,841
38,135
—
—
—
156,868

851,845

(64,588)

—

3,259

(67,847)

—

Millions of

U.S. dollars*

3/2008

$ 4,053
852
1,900
618
766
7,978
(488)
—
—
—
—
—
282

15,961
8,077

7,884

3,674
903
1,352
649
382
—
—
—
1,571

8,531

(647)

—

(679)

—

172,329

94,732

¥00,304,328

175,828

(67,847)

(679)

930,637
1,013,636
12,881,752
13,838,396
1,088,545

¥29,752,966
437,124
1,384,096
17,367,758
5,976,966
415,865
2,385,469

27,967,278

1,785,688

¥29,752,966

(57,125)
20,971
201,267
—
(18,978)
—

¥ 1,047,234
1,221,083
14,389,045
15,600,521
2,230,970

¥34,488,853
520,605
¥
963,965
21,666,185
5,332,173
1,309,944
2,827,552

32,620,424

1,868,429

¥34,488,853

(360,780)
(103,443)
448,531
—
13,697
(50,262)

¥01,555,636
1,363,681
17,027,807
13,697,441
1,381,470

¥35,026,035
691,759
¥
1,239,731
20,263,012
6,527,627
641,980
3,598,599
32,962,708

2,063,327

¥35,026,035

(565,214)
(4,678)
829,219
—
16,419
131,100

146,135

(52,257)

¥00,406,846

Reserve Bank of New York on March 31, 2008.

¥ 1,054,012
1,618,411
17,838,227
13,178,220
2,184,504

¥35,873,374
¥ 1,093,529
1,345,855
20,599,256
4,800,403
845,522
5,002,890
33,687,455

2,185,919

¥35,873,374

¥ (1,627,156)
(533,813)
1,568,703
—
10,333
—
¥ (581,933)

Millions of yen

¥ 1,434,067
1,872,027
10,391,367
10,656,505
1,944,832

¥26,298,798
¥ 1,426,266
1,328,698
10,540,731
5,154,369
636,184
5,224,426

24,310,674

1,988,124

¥26,298,798

Millions of yen

¥ (647,906)
(102,019)
942,879
(38,427)
(57,319)
—

97,208

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a
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S
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m
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G
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Millions of
U.S. dollars*

$ 14,362
18,748
104,070
106,725
19,478

$263,383
$ 14,284
13,307
105,566
51,621
6,371
52,323

243,472

19,911

$263,383

Millions of

U.S. dollars*

$ (6,488)
(1,022)
9,443
(385)
(574)
—

974

Annual Report 2008

Major Subsidiaries and Affiliates

As of July 1, 2008

Japan

NOMURA SECURITIES CO., LTD.

NOMURA ASSET MANAGEMENT CO., LTD.
• Osaka Office

• Fukuoka Office

• Sendai Office

THE NOMURA TRUST & BANKING CO., LTD.

NOMURA CAPITAL INVESTMENT CO., LTD.

NOMURA INVESTOR RELATIONS CO., LTD.

NOMURA PRINCIPAL FINANCE CO., LTD.

Americas

NOMURA HOLDING AMERICA INC.

NOMURA SECURITIES INTERNATIONAL, INC.

• San Francisco Office

• São Paulo Representative Office

NOMURA CORPORATE RESEARCH AND ASSET MANAGEMENT INC.

NOMURA FUNDS RESEARCH AND TECHNOLOGIES CO., LTD.

NOMURA DERIVATIVE PRODUCTS, INC.

NOMURA PENSION SUPPORT & SERVICE CO., LTD.

NOMURA GLOBAL FINANCIAL PRODUCTS, INC.

NOMURA BABCOCK & BROWN CO., LTD.

NOMURA RESEARCH & ADVISORY CO., LTD.

NOMURA BUSINESS SERVICES CO., LTD.

NOMURA FACILITIES, INC.

NOMURA INSTITUTE OF CAPITAL MARKETS RESEARCH

JOINVEST SECURITIES CO., LTD.

NOMURA HEALTHCARE CO., LTD.

PRIVATE EQUITY FUNDS RESEARCH AND INVESTMENTS CO., LTD.

Europe & Middle East

NOMURA EUROPE HOLDINGS PLC (London)

NOMURA INTERNATIONAL PLC (London)

• Madrid Office • Vienna Representative Office

NOMURA CODE SECURITIES LTD. (London)

NOMURA BANK INTERNATIONAL PLC (London)

• Italy Office

BANQUE NOMURA FRANCE

NOMURA NEDERLAND N.V.

NOMURA BANK (LUXEMBOURG) S.A.

NOMURA BANK (DEUTSCHLAND) Gmbh

MAINTRUST KAG

NOMURA BANK (SWITZERLAND) LTD.

• Geneva Office

NOMURA ITALIA S.I.M.p.A.

NOMURA FUNDS RESEARCH AND TECHNOLOGIES AMERICA, INC.

NOMURA INTERNATIONAL TRUST COMPANY

NOMURA SECURITIES (BERMUDA) LTD.

NOMURA CANADA INC.

NOMURA REALTY ADVISORS, INC.

NOMURA ASSET MANAGEMENT U.S.A. INC.

NOMURA GLOBAL ALPHA LLC

Instinet
INSTINET, INC.

Asia & Oceania

NOMURA ASIA HOLDING N.V.

NOMURA INTERNATIONAL (HONG KONG) LIMITED

• Seoul Branch Office • Taipei Branch Office • Hanoi Representative Office

NOMURA FUTURES (HONG KONG) LIMITED

NOMURA SECURITIES (HONG KONG) LIMITED

NOMURA ASIA LIMITED

NOMURA SINGAPORE LIMITED

NOMURA SECURITIES (SINGAPORE) PTE. LTD.

NOMURA FUTURES (SINGAPORE) PTE. LTD.

NOMURA MALAYSIA SDN. BHD.

NOMURA AUSTRALIA LIMITED

NOMURA SECURITIES PHILIPPINES, INC.

P.T. NOMURA INDONESIA

NOMURA CORPORATE ADVISORY (CENTRAL EUROPE) Private Company LTD. (Budapest)

CAPITAL NOMURA SECURITIES PUBLIC COMPANY LIMITED (Bangkok)

NOMURA CORPORATE ADVISORY (CENTRAL & EASTERN EUROPE) Sp.z.o.o. (Warsaw)

NOMURA CORPORATE ADVISORY (SHANGHAI) CO., LTD.

NOMURA (CIS) LIMITED (London)
• Moscow Office

NOMURA INVESTMENT BANKING (MIDDLE EAST) B.S.C. (c) (Bahrain)

NOMURA FUNDING FACILITY CORPORATION (Dublin)

NOMURA GLOBAL FUNDING PLC (London)

NOMURA EUROPE FINANCE N.V. (Amsterdam)

NOMURA STRUCTURED HOLDINGS PLC (Dublin)

NOMURA PRINCIPAL INVESTMENT PLC (London)

NOMURA EUROPEAN INVESTMENT LIMITED (London)

NOMURA ASSET MANAGEMENT U.K. LIMITED

NOMURA FUNDS RESEARCH AND TECHNOLOGIES CO., LTD., London Branch Office

Nomura Holdings, Inc.

NOMURA FINANCIAL ADVISORY AND SECURITIES (INDIA)

PRIVATE LIMITED

NOMURA ASSET MANAGEMENT SINGAPORE LIMITED

NOMURA ASSET MANAGEMENT MALAYSIA SDN. BHD.

NOMURA ASSET MANAGEMENT HONG KONG LIMITED

NOMURA ASSET MANAGEMENT CO., LTD., Seoul Representative Office

Nomura Securities Domestic Network

As of July 1, 2008

Kinki

Kanto

Akashi Branch
Daito Branch
Esaka Branch
Gakuenmae Branch
Higashiosaka Branch
Himeji Branch
Hirakata Branch
Ibaraki Branch
Kishiwada Branch
Kobe Branch
Kurakuen Branch
Kyoto Branch
Nanba Branch
Nara Branch
Nishinomiya Branch
Okamoto Branch
Osaka Branch
Otsu Branch
Sakai Branch
Senri Branch
Takarazuka Branch
Takatsuki Branch
Tennoji-eki Branch
Toyonaka Branch
Tsukaguchi Branch
Uehonmachi Branch
Umeda Branch
Wakayama Branch
Kyoto Branch, Kyoto Station
Building, The Cube Office
(Opening in August)
Umeda Branch, Diamor

Office (Opening in July)

Chugoku

Fukuyama Branch
Hiroshima Branch
Kurashiki Branch
Matsue Branch
Okayama Branch
Shimonoseki Branch
Tokuyama Branch
Yonago Branch

Kyushu

Fukuoka Branch
Kagoshima Branch
Kitakyushu Branch
Kumamoto Branch
Kurume Branch
Miyazaki Branch
Nagasaki Branch
Oita Branch
Saga Branch
Sasebo Branch

Aobadai Branch
Atsugi Branch
Chiba Branch
Fujisawa Branch
Funabashi Branch
Futamatagawa Branch
Hiratsuka Branch
Ichikawa Branch
Kamakura Branch
Kashiwa Branch
Kawagoe Branch
Kawaguchi Branch
Kawasaki Branch
Kofu Branch
Konandai Branch
Koshigaya Branch
Kumagaya Branch
Matsudo Branch
Mito Branch
Odawara Branch
Omiya Branch
Omiya Nishiguchi Branch

Ota Branch
Sagamihara Branch
Saitama Branch
Shiki Branch
Shinyokohama Branch
Shinyurigaoka Branch
Takasaki Branch
Tama Plaza Branch
Tokorozawa Branch
Totsuka Branch
Tsuchiura Branch
Tsurumi Branch
Urawa Branch
Utsunomiya Branch
Yachiyodai Branch
Yokohama Branch
Yokohama Bashamichi

Branch

Yokohama-eki Nishiguchi

Branch

Yokosuka Branch

Hokuriku

Fukui Branch
Kanazawa Branch
Niigata Branch
Toyama Branch

Hokkaido

Asahikawa Branch
Hakodate Branch
Kushiro Branch
Sapporo Branch

Tohoku

Akita Branch
Aomori Branch
Fukushima Branch
Hachinohe Branch
Koriyama Branch
Morioka Branch
Sendai Branch
Yamagata Branch

Shikoku

Kochi Branch
Matsuyama Branch
Takamatsu Branch
Tokushima Branch

Chubu

Gifu Branch
Hamamatsu Branch
Kanayama Branch
Kariya Branch
Kasugai Branch
Matsumoto Branch
Nagano Branch
Nagoya Branch

Nagoya-ekimae Branch
Numazu Branch
Okazaki Branch
Shizuoka Branch
Toyohashi Branch
Toyota Branch
Tsu Branch
Yokkaichi Branch

Tokyo Metropolitan Area

Chofu Branch
Fuchu Branch
Gotanda Branch
Hachioji Branch
Hamadayama Branch
Hatagaya Branch
Head Office
Iidabashi Branch
Ikebukuro Branch
Ikebukuro Metropolitan

Plaza Branch

Jiyugaoka Branch
Kamata Branch
Kanda Branch
Kichijoji Branch
Kinshicho Branch
Koishikawa Branch
Koiwa Branch
Kojimachi Branch
Kokubunji Branch
Machida Branch
Mita Branch
Nakameguro Branch

Nakano Branch
Nerima Branch
Ogikubo Branch
Omori Branch
Sakurashinmachi Branch
Sangenjaya Branch
Seijo Branch
Senju Branch
Shibuya Branch
Shinbashi Branch
Shinjuku Branch
Shinjuku-eki Nishiguchi

Branch

Shinjuku Nomura Building

Branch

Tachikawa Branch
Tamagawa Branch
Tanashi Branch
Tokyo Branch
Toranomon Branch
Ueno Branch
Denenchofu Branch
(Opening in July)

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Okinawa

Naha Branch

Annual Report 2008

Corporate and Other Data

Corporate Data

Date of Incorporation
December 25, 1925

Head Office
1-9-1, Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan

Share Data

Common Stock Issued
1,965,919,860 shares (As of March 31, 2008)

Listings
The common shares of Nomura Holdings are listed on the
Tokyo, Osaka, Nagoya, and Singapore stock exchanges. The
shares are also listed on the New York Stock Exchange in the
form of American Depositary Receipts. (As of March 31, 2008)

Securities Code
8604 (Tokyo Stock Exchange)
NMR (New York Stock Exchange)

Number of Shareholders
263,427 (Unit shareholders: 239,339) (As of March 31, 2008)

Major Shareholders (Top 10) (As of March 31, 2008)

Paid-in Capital
¥182.8 billion (As of March 31, 2008)

Group Employees
18,026 (As of March 31, 2008)

Transfer Agent and Registrar
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Department: +81 (3) 5391-1900

Depositary for American Depositary Receipts (ADRs)
The Bank of New York Mellon
Depositary Receipts Division: +1 (866) 680-6825
http://www.adrbnymellon.com
Ratio: 1 ADR = 1 ordinary share

Shares
Held
(Thousand
Shares)

Percentage
of Issued
Shares
(%)

120,113

6.11

Component Ratio of Shareholders

Financial Institutions
Individuals and Others
(%)
100

8.47

Foreign Legal Entities
Other Legal Entities

Securities Firms

8.88

8.09

7.28

7.25

Ranking

Shareholder Name

Japan Trustee Services Bank, Ltd.
(Trust Account)

The Master Trust Bank of Japan, Ltd.
(Trust Account)

State Street Bank and Trust Company

Hero & Co.*

115,525

75,485

53,896

State Street Bank and Trust Company 505103

37,230

Japan Trustee Services Bank, Ltd.
(Trust Account 4)

The Chase Manhattan Bank, 385036

Nippon Life Insurance Company

Trust & Custody Services Bank, Ltd.
(Investment Trust Account)

32,938

21,017

19,007

16,680

5.88

3.84

2.74

1.89

1.68

1.07

0.97

0.85

The Sumitomo Trust and Banking Co., Ltd.
(Trust Account B)

16,653

0.85

Note: The Company had 57,887 thousand shares of treasury stock (ranked 4th if

included).

* The fourth-largest shareholder, Hero & Co., is the former Depositary Nominees Inc.,

following a name change.

Date of Record for
Dividend Payments

First Quarter

Second Quarter

Third Quarter

Year-end

June 30

September 30 December 31 March 31

Dividend Payment September 1
Date*

December 1

March 1
(of following
calendar year)

June 1

* If the payment date falls on a weekend or Japanese national holiday, the dividend

will be paid on the next business day.

Other

Credit Ratings*

Nomura Holdings
Long-term Short-term

Nomura Securities
Long-term Short-term

S&P

Moody’s

R&I

JCR

A-
A 3
AA-
AA

A-2
—
a-1+
—

* As of June 30, 2008.

A
A2
AA-
AA

A-1
P-1
a-1+
—

Nomura Holdings, Inc.

21.58

1.10

24.61

0.83

22.73

0.93

22.00

24.50

1.23

1.08

40.44

37.90

43.66

44.06

39.75

28.40

27.77

24.60

25.43

27.42

3/2004

3/2005

3/2006

3/2007

3/2008

Auditor

Ernst & Young ShinNihon LLC

For More Information

Investor Relations Department

Nomura Holdings, Inc.

Otemachi Nomura Building

2-1-1, Otemachi, Chiyoda-ku, Tokyo 100-8170, Japan

Tel.: +81 (3) 5255-1000

www.nomuraholdings.com/investor/

Nomura Holdings Website Top Page

www.nomura.com

News Release Subscription Services
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news release is issued or new content is uploaded to
our website.

News
Click here to see the latest news releases, including
the quarterly earnings reports of Nomura Holdings.

Investor Relations
www.nomuraholdings.com/investor/

Financial Information

Presentations

Annual Reports

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A n n u a l R e p o r t

2008for the Year Ended March 31, 2008

FSC certified paper is used for the
main body of this annual report.

Printed using soy inks.

Printed in Japan