Nomura Report 2018
Nomura Holdings, Inc.
Integrated Report
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This report was produced
using non VOC inks.
All electricity to print this
booklet was generated by
green energy. (326kWh)
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Introduction
01
Delivering a
Better Tomorrow
02
Mission
Contributing to Society | We help to enrich society through our expertise in capital markets
Vision
Trusted Partner | As a leading financial institution, we aim to be the most trusted partner for our clients
Values
Entrepreneurial Leadership | With passion and courage, we continually innovate to meet the needs of our stakeholders
Teamwork | To build our values and 'Deliver Together', we promote diversity and collaboration across divisions and regions
Integrity | Personal integrity is paramount to us. We act honestly, fairly and openly
Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout NomuraNomura Report 2018 Introduction
“Place our clients at the heart of
everything we do”
A commitment that remains unchanged
since our founding
03
04
Index
Introduction
Index
Three facts you need to know about Nomura
About Nomura
01
04
05
07 History of the Nomura Group
09 Nomura Group Value Creation Model
11 Commitment to contributing to the creation of
an affluent society since our founding
Strategies for Value Creation
13 Message from Group CEO
19 Nomura Group Management Vision
21 Message from CFO
25
27 Special Feature : Expanding services tailored to
Financial and Non-Financial Highlights
clients’ life stages
29 Special Feature : Implementation of Innovation
31 At a Glance
33 Business Divisions: Retail Division
37 Business Divisions: Asset Management Division
41 Business Divisions: Wholesale Division
Strengths Supporting Value Creation
45 ESG Initiatives
47 Contributing to Sound and Sustainable Capital Markets
51 Corporate Governance
57 Outside Directors of Nomura Holdings
59 Directors, Executive Officers and Senior Managing Directors
of Nomura Holdings / Outside Directors of Major Subsidiaries
in Japan
61 Dialogue with Stakeholders
63
Interview with Outside Director: An Investor Asking Questions
from the Viewpoint of Governance
65 Risk Management
71 Compliance
73 Human Resources Strategy
77 Contributing to Sustainable Communities
79 Environmental Initiatives
Financial review
Corporate Information / Data
81 Key Financial Data
83
87 Eleven-Year Consolidated Financial Summary
89 ESG Data
93
95 Global Network / Services for Retail Client
97 Corporate Data / Share Information / Stock Price / Credit Rating
Independent Assurance / Key Events during the Year
Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout NomuraNomura Report 2018 Three facts you need to know about Nomura
3
Three facts you need to know
about Nomura
05
Unique Two-Pronged business model
Nomura’s Two-Pronged business model
Retail
Capital markets
Wholesale
1
To page 10
percent of listed companies in
Japan. Retail clients also
recognize our sales consulting
expertise and our ability to offer a
diverse range of products deriving
from our underwriting activity.
Leveraging these strengths, our
Retail Division recorded client
assets of ¥118 trillion at the end of
March 2018. Also, we maintained
our leading position at the top of
both Japan ECM and Japan M&A
League Tables (Thomson Reuters
April 2017 to March 2018).
Nomura’s strength is driven by our
Two-Pronged business model
which is based on our Retail and
Wholesale businesses. Nomura
has a long-established and
distinctive Retail Division in Japan.
Adding on to this strength, we
have our Wholesale Division,
which leverages our status as an
independent securities company.
The collaboration of these two
divisions has made our Two-
Pronged business model
successful. We earn high praise
from our corporate clients who
issue securities, on our ability to
make compelling proposals to the
clients as well as our extensive
distribution capabilities. We have
been able to forge close business
partnerships with roughly 60
One of Nomura’s distinctive
characteristics is that we are a
financial services group that operates
globally, but is based in Asia, with
Japan being its “Mother Market.”
We believe that in the future, we will be
able to export our successful Two-
Pronged Retail-Wholesale business
model towards the rest of Asia.
Currently, we run wealth management
businesses mainly in Hong Kong and
Singapore, and operate Retail
businesses in Thailand and Philippines.
At the same time, in our Wholesale
business in EMEA and Americas, we
are focused towards areas where we
have strength.
Particularly in the U.S., we continue to
hire talents with high levels of
expertise, broad experience and
relations in specific business sectors
to enhance our global capabilities. We
believe that business opportunities
between Asia and EMEA/Americas
are likely to increase over time. In an
effort to win these cross border
transactions, we will continue to offer
to our clients a broad range of
products and solutions, including
M&A advisory services and client
financing & solutions.
Leverage strengths in APAC to provide competitive services to clients
Connecting Markets East & West
EMEA
Clients
Focus on business
areas of strength
Americas
Strengthen
franchise
APAC
Expand franchise to
tap into growth
To page 10
2
3
Human resources are essential to
achieving sustainable growth.
Currently, approximately 28,000
employees work within the Nomura
Group across more than 30
countries, representing about 90
nationalities around the world. In
order to provide a broad range of
products to address our client’s
broad investment needs, it’s
important that we maintain a
diverse talent pool across
nationalities, ages and genders
continues to create new values by
using their various backgrounds.
With the belief that each and every
one of our employees should thrive
and contribute in the workplace, we
have launched the “Nomura Work
Connecting Markets East & West
06
Style Innovation” initiative, which
comprises of a “Work Style Reform”
program and “Health and
Productivity Management”
practices. In addition, we are
pursuing an initiative to help female
employees’ career-building and
work-life balance to establish a
work environment in which they can
thrive. In 2016, we adopted a
“Nomura's Declaration on Diversity
& Inclusion” based on our strong
determination to develop a work
environment where diverse
employees can play an active part
on a group-wide basis. In the
following year, we adopted a
“Nomura's Declaration to Support
Employee Balance Work and Family
Care” with the intent to build a work
environment that enables
employees who need to provide
Workforce diversity
nursing care for family members to
continue to work with peace of
mind.
Number of officers and employees
working at business sites in over 30
countries around the world
28,048
(As of March 31, 2018)
Nationalities of officers and
employees of Nomura Group
Approx. 90nationalities
(As of March 31, 2018)
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura History of the Nomura Group
Pursue long-term growth by
responding to clients’ needs and
providing a wide range of
financial services
(Nikkei Stock Average:yen)
40,000
Retail Client Assets
Nikkei Stock Average
30,000
Since its inception in 1925, the Nomura Group has continually expanded its product and service
offerings, developed its global operations and reinforced its corporate governance systems. Our
Founder set 10 principles that, even today, lie at the heart of Nomura’s operations. Among these
founding principles is a description of Nomura’s raison d’être or mission to “enrich the nation
20,000
through the securities business.”
We will continue to contribute to economic growth and a more fulfilling society by delivering
superior services and solutions to meet all of our clients’ investment needs.
07
10,000
Transformation of business
model of Retail Division
Enhancement of corporate governance
(Retail Client Assets:
trillions of yen)
120
90
60
30
08
1945
End of WWII
Games of the
XVIII Olympiad in Tokyo 1964
Japan’s
“Financial Big Bang” 1996
Introduction of the electronic
share certificate system
2009
iDeCo-Expansion
of eligibility
2017
1991
Collapse of
bubble economy
2007
Global
Financial crisis
2014
Start of Nippon
Individual Savings
Account program
0
1925
1930
1935
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2018
92 Years of
contributing to
the development
of capital
markets
History of the
Nomura Group
-1927 Operations centered on underwriting and sale of
1961 First American Depositary Receipts issued by Japanese
public and corporate bonds
company (Sony Corporation)
1941 Sale of Japan’s first investment trust products
1947 Public offering of 8 power stocks (currently electricity
stocks)
1949 Issuance of Japan’s first convertible bonds (I unit
Takashimaya convertible bonds)
1962 First overseas issuance of convertible bonds by a Japanese
company (Shin Mitsubishi Heavy Industries [currently
Mitsubishi Heavy Industries])
1968 Nippon Gakki (currently Yamaha) conducted public stock
offering by issuing Japan’s first shares at market value
1970 First issuance of samurai bonds by overseas entity (Asian
Development Bank)
1972 Deregulation of foreign investment trust sales in Japan
1980 Development and commencement of sales of the
Medium-Term Japanese Government Bond Fund
1987 Nippon Telegraph and Telephone (NTT) listed on stock
market
Early 1990s Adoption of Open Architecture: offering products
managed by a wide range of asset managers
1994 Global offering conducted by Japan Telecom
Japan Tobacco listed on stock market
2003 Commence of government bond issuance targeting individual investors by
Ministry of Finance
2015 Japan Post Group 3 companies listed on stock market
1925 The Securities Department of Osaka Nomura Bank
split off into a separate company, Nomura Securities
1959 Founded Nomura Securities Investment Trust
1961 Nomura Securities listed its shares on the Tokyo Stock
1981 Established Nomura Investment Management
2001 Formed a holding company structure: Nomura Holdings listed its shares
Established Nomura International, a U.K. subsidiary
on the New York Stock Exchange
1927 Opened representative office in New York
Exchange, Osaka Securities Exchange, and Nagoya Stock
Exchange
1967 Established Nomura International (Hong Kong)
1969 Established Nomura Securities International, a U.S.
subsidiary
1991 Loss compensation issues
Reform measure Enforcement and expansion of the internal
management framework
1993 Established The Nomura Trust and Banking
1997 Payoff issues
Reform measures Clarification of order distinction between proprietary
trading and brokerage orders; establishment of the Compliance
Hotline
To page 71
2008 Absorbed the personnel of Lehman Brothers Asia Pacific and its
European and Middle Eastern divisions
2012 Insider trading issues regarding capital increase
Reform measure Review and enhancement of the compliance framework
To page 71
2015 Nomura Founding Principles and Corporate Ethics
To page 71
2016 Entered into a strategic alliance with American Century Investments
Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout NomuraNomura Report 2018 Nomura Group Value Creation Model
Nomura Group
Value Creation Model
The Nomura Group’s business is executed according to our philosophy of always “placing our clients
at the heart of everything we do.” We contribute to the economic growth and creation of a prosperous
society by providing financial products, services, and solutions that are innovative and competitive,
while also utilizing our high-quality management resources. We strive to raise our economic value by
building a sustainable business foundation to support growth in any environment.
Social issues
Management
resources
Our businesses
Our strengths and strategy
INPUT
Retail Division
EMEA
Americas
Japan
09
Aging population with a low birthrate,
limits to social security system
Necessity of shift from savings to
asset building
Evolution of corporate governance
Global
Prepare for potential geopolitical risks
Supply risk assets to growth industries
and countries
Pursue opportunities for corporate growth
Promote innovation
Human
capital
Intellectual
capital
Social
capital
Physical
capital
Financial
capital
Provide products and services
to individual and corporate
clients through our branches
throughout Japan
To page 33
Asset Management Division
Providing asset management
services globally
To page 37
Wholesale Division
Global Markets
Provide a variety of financial
services, including trading,
sales and structuring to our
institutional investors and
corporate clients
Investment Banking
Support our clients by
underwriting bonds and stocks
and providing M&A and other
advisory services
To page 41
Merchant Banking Division
Primarily offers equity to clients
as a solution for business
reorganizations and
revitalizations, business
succession and management
buyouts since January 2018.
Leverage strengths in APAC to deliver competitive services
to clients in Europe/US and Asia
Connecting Markets East & West
APAC
Japan
Exports Two-Pronged Retail-
Wholesale business model
Two-Pronged Retail-Wholesale business model
Preparing for the future
Investment (reinvestment)
Returns
Profits
Retail
Strengths
Consulting expertise
Diverse product offering
Capital
markets
Wholesale
Strengths
Capacity to make proposals
Underwriting and sales
capabilities
Improving living
standards
Capital gains, dividends and
interest income
Financing
Investment
Nomura’s presence
Number of branches
(As of June 30, 2018)
Retail client assets
156
¥117.7
trillion
Assets under
management
¥50.0
trillion
Percentage of Japanese
listed companies that name
Nomura as lead / deputy
underwriter
Approx. 60%
Help tackle social issues
Reinvestment
Value creation
OUTCOME
Raising social value
Contribute to the resolution
of social issues
Realize the founder’s mission
to “enrich the nation through
the securities business”
Enhance human capital,
intellectual capital and social
capital by improving
financial literacy and
supporting innovation
Raising economic
value
Create an operating platform
capable of delivering
consistent growth in any
environment
FY2019/20 management target
EPS of ¥100
(FY2017/18: ¥61.88)
Invest in areas of growth
Provide appropriate
shareholder returns
10
Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout NomuraNomura Report 2018 Commitment to contributing to the creation of an affluent society since our founding
Commitment to contributing to the creation
of an affluent society since our founding
Since its founding, Nomura Group has contributed to economic growth and creation of social value by supporting the
development of capital markets and promoting the circulation of risk money.
In recent years, against the backdrop of expanding environmental, social and governance (ESG) investment, financial
institutions have been required to consider the environment and society even more than before.
We believe that our provision of financial services that aim to realize a sustainable environment and society will lead us to grow
and at the same time achieve Sustainable Development Goals (SDGs), common targets for 2030 in the global community.
Nomura Group formulated a management vision (“Vision C&C”) in 2014 and has been striving to create a solid operating
platform that can deliver consistent growth in any market environment.
In addition, as we aim to help solve social issues more broadly, we have identified ESG materiality (priority issues) by
analyzing issues for our stakeholders and the Group, and prioritizing them by importance.
Looking to 2020 and beyond, we are committed to sustainable growth and to the building of a sustainable society.
11
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Since its founding, Nomura Group has been committed to contributing to the development of society at all times.
We believe CSR is an essential part of Nomura Group’s commitment to implementing our Founder’s Principles—
principles that have been passed down since Tokushichi Nomura founded the company.
Our Founder’s Principles are the cornerstone of our business activities
1. Nomura’s raison d’être
“Nomura’s mission is to enrich the nation through the securities business.
This is something we must absolutely see though.”
2. Principle of putting the customer first
“We must place our customers’ interests before our own.”
3. Global ambition
“Nomura is destined to become an active player on the international stage.”
4. Emphasis on rigorous research and analysis
“We have a duty to research scientifically the intrinsic nature of all securities.”
5. Staying one step ahead
“Always strive to stay one step ahead. Standing still is retrogressive.”
6. Entrepreneurial spirit
“If, as an entrepreneur, you can determine something to a 70% certitude, you must have
the courage to take up the challenge even though some uncertainty remains.”
10 principles set out by our founder
We remain committed to enriching
society by delivering superior services
and solutions to our clients that meet
all their investment needs. This has
been our unwavering spirit since our
founding. It is our social mission and
our raison d’être.
7. Human resources
“Nomura underscores the fact that the development of human resources, acquisition of
talented personnel and ability to match the right talent with the most appropriate position
are more formidable assets than sheer capital strength.”
8. Emphasis on team work
“It is the management’s task to see that Nomura employees take responsibility and pride in
their work and to form a unified team under the control of branch office managers.”
9. Business development frame of mind
“We must have the courage to boldly follow the path of our convictions.”
Nomura Group’s Management Vision
Nomura Group’s Material ESG Issues
In August 2014, we announced Vision C&C, our
management vision towards FY2019/20, with the aim of
creating an operating platform capable of delivering
consistent growth in any market environment. Based on
the two main strategic themes of “business model
transformation in Japan” and “improvement in the
profitability of our international businesses,” we are
steadily progressing toward establishing a business
capable of generating an EPS of ¥100. Moreover, we will
continue to launch initiatives to achieve long-term growth
beyond 2020.
To page 19
We have assessed “the materiality to stakeholders”
and “the materiality to Nomura Group” of
environmental and social issues, and we have identified
the material issues that are of high importance to both
stakeholders and the Group.
Initiatives on these ESG issues also contribute to
achieving SDGs. For Nomura Group, SDGs encourage
us to continue and further enhance our unceasing
activities since our foundation to “help to enrich society
through our expertise in capital markets.” While we
have a role to play in all 17 SDGs, the most relevant
goals have been identified as follows.
To page 45
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Nomura Group’s materiality
high
very high
Material ESG issues for the Nomura Group
Contributing to sound and sustainable capital markets
Corporate governance
Offering high-quality financial services
P72
Products and services that address environmental and social issues P47
P72
Customer protection and information security
P50
Improving financial literacy
Enhancing corporate governance
CSR management
P51
P45
Contributing to sustainable communities
Risk management
Tokushichi Nomura
Founder
10. Customer service mindset
“If you conduct your work in a mechanical manner, believing simply that your role is over
once the deal is done, there is no use in drawing on the strengths of those around you.”
Global CSR initiatives
Communication with stakeholders
P78
P77
Enhancing and strengthening risk management systems P65
P66
Ensuring financial soundness and transparency
P70
Business resilience
P69
Social and environmental risk management
Founder’s Principles
Strategies
Contributing to social issues
Nomura’s Two-Pronged business model
“Nomura’s
mission is to
enrich the
nation through
the securities
business.”
Retail
Capital markets
Wholesale
Material ESG
issues
To page 10
Fostering human resources with a respect for diversity
Compliance
Fostering human resources
Diversity and inclusion
Employee-friendly work environments
Respecting human rights
P74
P75
P75
P75
Legal compliance and reporting of violations
Ensuring fair financial business practices
Prevention of bribery
Prevention of money laundering
P72
P72
P72
P72
Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout NomuraNomura Report 2018
Message from Group CEO
Creating a better tomorrow as
a trusted partner to our clients
Koji Nagai
Group CEO
13
14
Driven by the happiness and
appreciation of our clients
I started my career at Takamatsu Branch, where I was
working in the Retail business with individual investors.
I was a new university graduate in an unfamiliar
environment. On my way to visit a client one day, I got
caught in a sudden downpour. I managed to find
shelter and made my way to the client’s house after
the rain eased up.
I was soaking wet and muddy. As I hesitated to enter
the house, my client handed me a towel and invited me
in with a warm smile. She thanked me for coming
despite the heavy rain and, at the end of my visit, she
bought some products and thanked me for the
proposals I had made.
Since then I spent my time making a wide range of
proposals to wealthy individuals and the management
of mid-sized companies in the local community. I
learned first-hand that individual risk money is the main
source of the investment chain. These early years are
the driving force behind everything I do today.
Two-Pronged business model
After working exclusively in Retail, I was transferred to
Wholesale at age 40. Retail and Wholesale are
completely different businesses, so at the time, I felt as
if I had been transferred to another company.
However, I came to realize from my experience in both
Retail and Wholesale that there is a unique connection
between the two businesses at Nomura. In the
financial services industry, wholesale businesses such
as underwriting are generally considered upstream
and retail operations such as sales are downstream.
But at Nomura, we employ a holistic approach. This is
because the principle that the investment chain starts
with individual risk money is deeply ingrained in our
culture.
Issuers are well aware of our distribution capabilities
and we have been able to forge close business
partnerships with roughly 60% of listed companies in
Japan, as well as government organizations worldwide,
and global financial institutions.
Corporate clients highly rate our ability to make
compelling proposals as well as our extensive
distribution capabilities. Retail clients recognize our
consulting expertise and diverse product offering. This
is why they choose Nomura. It is also why our Retail
and Wholesale businesses have never been separated
and operate in unison.
Asia as our home market
In our home market of Japan, we have established a
robust platform underpinned by our successful Retail-
Wholesale Two-Pronged business model. We believe
that this business model can be exported to Asia. Asia
has a growing economy and is expected to account for
52% of the world’s GDP in 2050.
However, Asia is a diverse region where each country
is at a different stage of population growth and
economic development. To establish a viable Retail
business in any country, there needs to be a middle
class and per-capita GDP of US$15,000 to
US$20,000. We believe that Asian countries will enter
this zone. We have an advantage in this region and we
believe there will be ample opportunities to further
grow our business.
To successfully export our Two-Pronged business
model to Asia, we will have to make some changes.
Other Asian countries are far ahead of Japan in terms
of digital transformation and the fusion between the
Internet and the real world. As such, we will have to
pursue business opportunities while strategically
leveraging our digital platform and consulting services
for mass affluent individuals.
Capital Nomura Securities, which was established in
Thailand in 1970, is already applying our two-pronged
model to its businesses. BDO Nomura Securities, an
online securities company that we established in 2016
with BDO (Banco de Oro) Unibank, the largest
commercial bank in the Philippines, has gained
130,000 accounts in a period of a little less than two
years (as of June 2018). BDO Nomura Securities is
now the second largest online securities house in the
Philippines in terms of the number of securities
accounts. In May 2018, we applied to the China
Securities Regulatory Commission for a license to
establish a joint-venture securities company to serve
wealthy individuals in China.
I firmly believe that having a two-pronged model that
connects Asia including Japan to Europe and the
Americas will give us a competitive edge that sets us
apart from our peers. That is the essence of
Connecting Markets East & West.
Structural changes transforming
business
There are three major structural changes currently
taking place. The first change concerns the possibility
that we are in a G-Zero era in which no country is willing
to assume the responsibilities of global leadership.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Message from Group CEO
Added to this is growing populism where countries are
looking out for their own interests. These trends
undermine international security and economic
transactions, and the arising frictions lead to geopolitical
risks that cast a dark shadow over financial markets.
The second change is Japan’s aging population, and
rapidly declining birthrate. People 75 years old and
older comprised about 25% of Japan’s total population
in 2015. In 2030, they are expected to account for
about 30% of the population and maximum 46% of
financial assets held by individuals in Japan. We are
unable to provide adequate services to these elderly
clients due to compliance reasons. With more people
expected to live to a hundred, we expect this client
segment to grow further. Meanwhile, with the aging
society and falling birthrate, the working-age
population has lost confidence in the public pension
system and feels they must secure their own post-
retirement funds.
The third change is the rapid advances in digital
innovation. I find this change the most worrying. The
dilemma of innovation is that the champion stands to
lose the most when the rules of the game change. In
the securities business in Japan, Nomura is that top
player with the most at stake. Rather than waiting for
the rules to change, we have to get ahead of the
game and change it ourselves. We have to become
the game changer.
Aiming for sustainable growth
In August 2014, we announced our long-term
management vision for 2020. This calls for us to create
a robust operating platform capable of delivering
consistent growth under any conditions. We set
earnings per share (EPS) of ¥100 as one of our key
goals for 2020.
In order to realize our vision, we are working to address
two issues: transforming our Retail business model
and improving the profitability of our international
operations. Market conditions affect our business
performance, and we have to be prepared for shifts in
the financial market due to geopolitical risks.
In Retail, our focus is on increasing recurring revenue,
and in Asset Management we are working to expand
our product offering and distribution channels. In
Wholesale, we continue to reduce our focus on
traditional secondary trading while continuing to provide
financing and solutions that meet our clients’ needs.
Improving business efficiency is another important
15
Matrix management structure (After April 1, 2018)
Koji Nagai
Group CEO
Shoichi Nagamatsu
Deputy President
Toshio Morita / Kentaro Okuda
Group Co-COO
Retail
Asset
Management
Wholesale
Merchant
Banking
Eiichiro Yamaguchi
Head of Retail
Kunio Watanabe
Head of Asset Management
Steven Ashley
Head of Wholesale
Masahiko Maekawa
Head of Merchant Banking
JAPAN
Toshio Morita President, Nomura Securities / Yuji Nakata Deputy President, Nomura Securities
Asia ex-Japan
EMEA
Americas
Vikas Sharma Head of Asia ex-Japan
Jonathan Lewis Head of EMEA
Kentaro Okuda Head of Americas
Satoshi Arai
Chief of Staff and Group Strategy
Takumi Kitamura
Chief Financial Officer (CFO)
Lewis O’Donald
Chief Risk Officer (CRO)
goal. Within the next four years, we plan to reduce
fixed costs by 60 billion yen through further
digitalization and automation, and by driving
efficiencies through centralized procurement and
optimization of our global real estate footprint.
Looking 10 to 20 years ahead
As Group CEO, I must work hard to ensure that we
achieve our 2020 management vision. I also have a
responsibility to look beyond 2020 and create
something that will have an impact over 10 to 20 years
to provide opportunities for young people to invest in
stocks and investment trusts.
Our Asset Management business also invested in 8
Group in April 2018. Leveraging 8 Group’s excellent
mobile application development skills and Nomura’s
investment capabilities and extensive product offering,
we intend to provide investment services to clients in
the asset building segment.
Pursuing digital innovation
As long as we can swiftly create
quality products and services for our
clients, I am not concerned whether
we pursue innovation on our own or
through open innovation including
tie-ups with other companies. In
2015, we established a FinTech
Committee, and a Financial
Innovation Office to help further
enhance our businesses through
innovation. I meet with people in the
Financial Innovation Office once a
month. Each month, they update me
about new technologies and
innovative ideas on all the
technological changes taking place
in the world. It is a very rewarding
and productive meeting that I look
16
in the future.
To address the rapidly aging Japanese society, we
have assigned specialists called Heartful Partners to
Retail branches throughout the country to help elderly
clients. We are also conducting a joint research project
with Keio University on financial gerontology, and are
using the results of our research to provide advice to
older clients on how to manage their assets.
Developing strategies to work with the next generation
is also critical. Most people open a bank account when
they enter university or start working, but few people
open a securities account. Even with the largest
number of securities accounts in Japan, we still only
have about 5,300,000 accounts, and only 3% of
Japanese people in their thirties and forties own a
securities account.
To address this, we entered into a business
partnership with LINE Corporation. As of March 2018,
LINE has 75 million monthly active users in Japan. This
is equivalent to 60% of Japan’s total population, and
74% of these users are asset-builders under 50 years
of age. People all over Japan who have no relationship
with Nomura can access our services through the
LINE platform. We intend to leverage the LINE platform
forward to every month.
Through our Voyager accelerator program in Powai,
India, in addition to our initiatives in Japan, we have
received innovative proposals from startups around the
world, including Silicon Valley. In April 2017, we
established a dedicated innovation subsidiary N-Village in
the heart of Tokyo, where there is a large concentration
of digital start-ups. N-Village is charged with new
business development and investing in startups.
While we do not have any plans at present to offer
virtual currencies, we are researching B2B digital asset
custody that uses blockchain technology.
I am personally committing to pursue these initiatives
to ensure that we can leverage digital innovation in
our business.
Contributing to society through our
core business
In January 2018, we announced our corporate slogan,
Delivering a better tomorrow, which captures the
essence of the Nomura Group Corporate Philosophy.
While I feel that Our Founder’s Principles must evolve
over time, our commitment to enriching the nation
through the securities business and placing clients at
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Message from Group CEO
17
the heart of everything we do is an indelible part of our
DNA that must never change. Our dedication to
contributing to society through the capital markets
remains unchanged. The success of business depends
on our responsibility to our clients, shareholders, our
people and society, in other words the S in ESG
(environment, social and governance).
I believe that by bringing investors and companies
together the securities business provides companies
with the risk money needed for their business
operations. And by helping investors manage their
assets it contributes to the development of the
economy and society.
The United Nations’ Sustainable Development Goals
(SDGs) have been attracting considerable attention
recently. Our long-term management vision, Vision
C&C, aims to create a solid operating base to achieve
sustainable growth by 2020. We believe that this will
help contribute to SDG’s aim to realize a thriving society.
Investors are paying increasing attention to the ESG
initiatives of companies. This year, we established a
dedicated ESG Committee that I will head as Chairman
to further promote our ESG activities.
Strong corporate governance
Corporate governance is one of our strengths. As a
company with three committees, we have clearly
separated the business execution function from the
management oversight function. Delegating extensive
authority to executive officers also enables speedy
decision-making, and six out of our ten Board directors
are Outside Directors, ensuring effective oversight of
business execution.
At our monthly Board of Directors’ meetings, our
Outside Directors ask challenging questions and
express various opinions, which I feel add to the
quality of our corporate governance system. I believe
that a system in which Outside Directors can freely
express any concerns or opinions they have is critical
to effective corporate governance.
While we value the opinions of Outside Directors,
management decisions are not based solely on their
opinions. As Group CEO, I am ultimately responsible
for all management decisions. I therefore make the
final decision on all matters after carefully considering
the different views. I make my decisions fully aware
that Outside Directors comprise a majority of the
Board of Directors, and the Board has the authority to
appoint, or dismiss, executive officers, including the
Group CEO.
Learning from our past mistakes
Never forgetting our past mistakes is critical to
achieving consistent growth. In 2015, we established
August 3 as Nomura Founding Principles and
Corporate Ethics Day. August 3 is the day in 2012
when we received a business improvement order. On
this day each year, all employees watch a video and
reflect on all our past mistakes: the 1991 loss
compensation incident, the corporate racketeer
incident in 1997 and the insider trading incident in
2012. I have visited more than 150 retail branches
since becoming Group CEO and spoken to many
young employees who did not know about these
incidents. I felt it was important not to forget our past
mistakes with the passage of time.
I still sometimes meet young employees who know
nothing about the incident in 2012. This is why we
must continue this initiative. Our employees overseas
are especially amazed that we continue talking about
these incidents. But I feel that we must never forget
our past actions.
Developing future leaders
Training and developing the next generation of
managers is a key component in ensuring
sustainable growth. We have a unique business
model. Our headquarters is in Japan and we engage
in Retail, Asset Management, Wholesale and
Merchant Banking businesses, and we also have
extensive global operations.
It is difficult to find an individual who has experience in
all areas of our business, and who can handle the
overall management of the company. A company is a
public entity and, as such, leaders must prioritize the
running of the company over personal interests. For
this reason, the next generation of leaders must make
contributing to the firm and society their top priority,
with the support of a capable team.
It is difficult to develop talent through instruction alone.
Employees must learn through their own experiences
over time. For example, we promote top performing
employees in their mid-thirties to manager, and send
future management candidates overseas to help them
develop a global perspective. Transferring employees
to different departments is one way to foster people
development. Nomura has many capable people and I
look forward to their growth in the future.
Enhancing shareholder returns
As top management, I have been closely watching our
share price and I am not at all satisfied with the current
level. While we have no control over the share price
itself, I recognize that our medium to long-term
performance and valuation can greatly impact it. To
enhance performance over the medium to long term,
we must build a strong operating platform that ensures
consistent growth in any market environment. This is
From the left
Vikas Sharma Head of Asia ex-Japan Kunio Watanabe Head of Asset Management Masahiko Maekawa Head of Merchant Banking
Toshio Morita Group Co-COO
Jonathan Lewis Head of EMEA
Shoichi Nagamatsu Deputy President Kentaro Okuda Group Co-COO
Eiichiro Yamaguchi Head of Retail
Koji Nagai Group CEO
Steven Ashley Head of Wholesale
18
why I, as Group CEO, have made raising our EPS a key
management goal and have worked to increase our
EPS to double digits.
In Retail, our goal is to increase client assets to ¥150
trillion by 2020. We have so far increased client assets
from approximately ¥70 trillion in 2012 to ¥120 trillion.
Asset Management aims to grow assets under
management to ¥55 trillion, over ¥50 trillion of which was
achieved in the most recent quarter. In Wholesale, we are
working to improve profitability to increase our fee pool
market share to 3.4%. Wholesale has also significantly
reduced costs by reviewing its business portfolio.
In 2009, we implemented two capital increases which
significantly increased the number of outstanding
shares and diluted the value of our shares. Through
proactive share buybacks since 2014, and by setting
cancelation policy of our own shares in excess of 5%
of outstanding shares in November 2017, we continue
to reduce the number of outstanding shares.
However, Nomura must maintain a robust financial
position that allows it to meet regulatory requirements
and conduct our businesses globally. At the same
time, we need to strike a balance between retained
earnings and shareholder returns.
We have much more work to do. We are focused on
implementing our strategy to build an operating platform
that allows us to consistently deliver EPS of ¥100, the
level before the capital increases, in order to reward our
shareholders who have patiently supported.
We seek to deliver a better tomorrow as a trusted
partner to our clients, embodying the values of
entrepreneurial leadership, teamwork and integrity, in
order to fulfill our mission of enriching society.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Nomura Group Management Vision
In August 2014, we announced Vision C&C, our management vision towards FY2019/20,
with the aim of creating an operating platform capable of delivering consistent growth
in any market environment. Based on the two main strategic themes of “business model
transformation in Japan” and “improvement in the profitability of our international
businesses,” we are steadily progressing toward establishing a business capable of
generating an EPS of ¥100. Moreover, we will continue to launch initiatives to achieve
long-term growth beyond 2020
Management target (EPS*1) and its progress
Long-term management
vision for 2020
“Vision C&C”
Two Challenges
Transforming business model in Japan
Improving profitability of international business
100
Conservative scenario based
on KPIs and current market
conditions continuing
100
FY2015/16 management target
EPS ¥50
Achieved target 2 years ahead of
schedule
60.03
55.81
65.65
61.88
28.37
35.52
19
7.86
3.14
(yen)
FY
2010/11
FY
2011/12
FY
2012/13
FY
2013/14
FY
2014/15
FY
2015/16
FY
2016/17
FY
2017/18
FY2019/20
(target)
2020+
Conservative
scenario
“Vision C&C”
The business environment surrounding Nomura is expected to change even more dramatically than
in the past and we see this as the perfect “chance” to take decisive action and “change” the way we
operate. We expressed this as “Vision C&C,” where “C&C” represents a chance to change.
The letter “C” also demonstrates our willingness to always take on new “challenges” and put our
“clients first.” Under this overriding vision, we will focus on achieving our 2020 management targets.
Beyond 2020 “Post Vision C&C”
Business alliance with
LINE Corporation
In May 2018, Nomura, LINE Corporation and LINE Financial
Corporation signed a joint venture agreement to establish LINE
Securities Corporation. Through LINE Securities Corporation
platform, we will offer online securities brokerage services,
securities investment consultation and other related services,
which targets the asset-building generation.
Offer investment
services utilizing
8 Group’s mobile
app development
capabilities
In April 2018, we invested a total of approximately ¥2.7 billion to
8 Group, which excels in mobile app development. Using iOS
and Android mobile apps, we plan to offer discretionary robo-
advisory services investing in ETFs and the Funds-i index fund
series managed by Nomura Asset Management Co., Ltd.
Launch of Merchant
Banking Business
Full-scale entry into the
Chinese market
In January 2018, we established the Merchant Banking Division.
With an initial investment of up to approximately ¥100 billion, we
will provide solutions to clients who face increasingly diversified
and complex issues, primarily using equity capital in projects
involving business reorganizations and revitalizations, business
succession as well as management buyouts.
In May 2018, we applied to establish a joint venture securities
firm with the China Securities Regulatory Commission. The new
company will be initially focus on providing wealth management
services to mass affluent individuals in China by leveraging
Nomura’s experience and knowledge in this area. It will then
develop its product distribution channels and expand into
Wholesale and other business segments.
Implementation of
Innovation
In order to provide more value to our clients and to pursue
new business opportunities, we will continue to focus more on
innovation, including the use of technologies.
20
Key performance indicators (KPIs)*2 to
achieve FY2019/20 management target
2020 management target
EPS ¥100
(EPS ¥61.88)
Three segments income
before income taxes
¥450-470 billion
(¥269.9 billion)
( ) is for FY2017/18, or as of March 2018
Retail
¥195-205 billion
(¥103.1 billion)
Asset Management
¥50-55 billion
(¥66.2 billion)
Wholesale
¥200-220 billion
(¥100.6 billion)
*1 Basic net income attributable to Nomura Holdings shareholders per share (EPS)
*2 FY2019/20 market assumptions: Nikkei 225 at ¥25,000; USD/JPY rate at ¥115; Effective tax rate for Japanese corporations below 30%; Global fee
pool annual growth rate of 1%
To page 29
To page 33
To page 37
Retail client assets
¥150 trillion (¥117.7 trillion)
Recurring revenue cost coverage ratio
around 50% (28%)
Our Retail Division continues to transform its business model in order to strengthen
the business by enhancing trust of our clients and improving their satisfaction, and
to become a financial institution to which people turn to. KPIs we target as we head
towards FY2019/20 are client assets of ¥150 trillion and a recurring revenue cost
coverage ratio of approximately 50%. We are striving to build an earnings structure
that is resilient to changes in market conditions.
Assets under Management
¥55 trillion
(¥50.0 trillion)
Fee pool market share
3.4%
(3.1%)
The asset management industry is expected to see sustainable expansion. Meanwhile,
we anticipate that competition involving those participating from other sectors outside
the industry will intensify against a backdrop of changing client investment management
needs and technological innovation with progress of digital innovation. In this environment,
Asset Management Division is working to broaden our client base and extend investment
products through continuous enhancement of our investment expertise, utilization of
technologies and customer-oriented business conduct, aiming to achieve our target KPIs.
In Wholesale Division, our initiatives focus on strengthening our business foundation
in order to deliver sustainable performance under any market environment. To achieve
our target KPIs, we will expand the Client Financing & Solutions offerings, strengthen
our business in the Americas, and target cross border transactions.
To page 41
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Message from CFO
CFO’s key focus areas
Support Nomura Group’s sustained
growth from the financial aspects
Maintain an appropriate financial base
that enables compliance with
regulations
Provide appropriate shareholder
returns
21
22
Provide the financial and
capital support needed to
execute management
strategies and enhance
corporate value
Takumi Kitamura
Chief Financial Officer
Nomura Group’s financial/capital
strategies (philosophy)
With the aim of building a sustainable business
foundation to support growth in any environment,
Nomura Group has been working to promote initiatives
for achieving the KPI targets for the fiscal year ending
March 2020 and to make preparations with an eye to
2020 and thereafter. I believe that my role as the CFO is
to support the execution of these management
strategies from a financial and capital perspective.
As a financial institution that operates globally, we are
subject to regulations in various aspects including
capital and liquidity. In addition, our financial base is
required to be above certain standards to maintain an
appropriate credit rating. In the meantime, we seek to
secure an adequate level of capital by taking into
account internal requirements such as what financial
buffer we are to keep as an ongoing entity, what
investment buffer we need for growth, and most
important of all, how efficient we must be in using the
capital entrusted to us.
My mission is to maximize returns while efficiently using
limited resources, and at the same time to enhance our
corporate value through providing appropriate
shareholder returns and maintaining dialogues with
stakeholders including shareholders and investors.
Decomposition of factors affecting financial/capital strategies
Shareholders
(returns)
External requirements
Various regulations/
rating
Pursuit of optimal
capital
Businesses
(capital allocation)
ROE
Financial buffers
Investment buffers
Internal requirements
Optimization of
resource allocation
Improved
profitability
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Message from CFO
Response to various regulations
Among the various global financial regulations that
Nomura Group is expected to comply with, the capital
requirements imposed by the Basel Committee have a
direct impact on how we operate our businesses. As we
anticipate a minimum consolidated Common Equity Tier1
(hereinafter, “CET1”) ratio requirement to be
approximately 7.5% from 2019 and thereafter, we aim to
maintain a CET1 ratio of 11% or higher, including financial
and investment buffers, over the medium term.
In 2022, a major revision will be made to the calculation
of risk weighted assets, the denominator in the
calculation of CET1 ratio. In particular, with the
introduction of Fundamental Review of the Trading Book
(FRTB) implementation process, the Basel standards for
market risk, which is an aspect of risk weighted assets,
will be raised significantly. However, as the details of the
revised regulation have not been finalized, we are
currently not able to precisely estimate the impact, and
therefore we keep a certain buffer relating to our CET1
ratio. Considering that businesses are reducing the use
of resources in light of the recent market conditions, the
level of our CET1 ratio as of March 31, 2018 (16.5% on a
fully loaded basis) is at a level where we have flexibility
compared to our medium term target.
In April 2018, the Financial Services Agency of Japan
announced that in addition to G-SIBs*1 in Japan, namely
the three mega banks, TLAC*2 requirements will start to
apply to Nomura from March 31, 2021. We are required
to increase TLAC eligible debt*3. However, we have
sufficient time before March 2021 and the regulations will
take effect in a phased manner. Accordingly, we expect
to be able to satisfy the current requirements by replacing
a portion of existing liabilities when they become due with
TLAC-eligible instruments.
Consolidated Capital Adequacy Ratio*1
(trillions of yen)
20.0
Risk weighted assets
Consolidated Common Equity Tier1 ratio*2
16.5
18.2
15.4
11.9
13.2
12.9
Consolidated Common Equity
Tier1 ratio (medium term target)
more than 11%
15.0
10.0
5.0
0
(%)
20.0
15.0
10.0
5.0
0
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
*1 Based on Basel
*2 CET1 capital ratio is defined as Tier1 capital minus Additional Tier1 capital
divided by risk-weighted assets.
Minimum TLAC requirements and response measures
Conceptual diagram of
balance sheet (current)
After TLAC
regulations are
applied
23
Minimum level
requirement
March
2021~
March
2024~
Other
liabilities
Assets
Borrowings/
senior debt
(NHI*4)
Borrowings/senior
debt
TLAC
eligible
debt (NHI*4)
TLAC
Regulatory
capital
Regulatory
capital
We plan to meet current requirements by replacing
a portion of existing liabilities of NHI*4 when they
become due with TLAC eligible debt.
1 Requirements concerning risk weighted assets
(Regulatory capital + TLAC eligible debt)
16%
18%
Risk weighted assets
2 Requirements concerning leverage exposure
(Regulatory capital + TLAC eligible debt)
6%
6.75%
Leverage exposure
*1 Global systemically important banks designated by the Financial Services Agency of Japan based on the list published by the Financial Stability Board
*2 Abbreviation for Total Loss-Absorbing Capacity. It is a Total Loss-Absorbing Capacity aimed to promote financial stability
*3 Liabilities, etc. that satisfy requirements for loss absorbing capacity as defined by the Financial Services Agency of Japan
*4 Nomura Holdings, Inc.
Optimization of resource allocation and
improved profitability
We allocate risk weighted assets, economic capital,
unsecured funds, leverage exposure and other resources
to businesses, regularly monitor profitability relative to the
amount of resources, and periodically review the
resource allocation while engaging in dialogues with
businesses. In addition, we make strategic decisions on
our business portfolio as a whole by considering not only
profitability, but other factors such as allocation of
resources to gain diversification benefits during times of
stress.
When we invest in our future growth, we assess the
effectiveness of these investments by analyzing whether
the investment can complement our existing business
and whether synergies are expected. We allocate capital
to investments that are expected to consistently exceed
capital cost.
To enhance profitability, cost control is also an important
factor. In 2016, we undertook a strategic review of the
Wholesale business in EMEA and the Americas, and
fundamentally revamped the portfolio, including a partial
exit from low-profit businesses. As a result of these
sustained initiatives, the expense ratio (for the three
segments) has been below 80% since the fiscal year
ended March 31, 2017.
At the overall group level, we are continuing to reduce
costs, particularly fixed costs. By improving business
process efficiency through the use of technologies,
centrally controlling purchases, and reviewing real estate
strategies on a global basis, we aim to reduce firm-wide
fixed costs by approximately ¥60 billion over the next four
years. We also plan to control variable costs to maintain
expense ratio below 75% over a medium term compared
to the current level of slightly lower than 80% (for the
three segments) by continuing to emphasize the concept
of “Pay for Performance.”
Non-interest expenses for the three segments
Expense ratio
80%
86%
77%
79%
< 75%
(billions of yen)
1,082.6
1,071.6
934.5
985.7
Variable
costs
Fixed
costs
Pay for Performance
Driving efficiency
(Corporate Operating Model)
Digitalization / Automation
Cloud outsourcing
Integrated purchasing
Global real estate strategy
24
Fixed costs
to decrease
Reduce firm-wide fixed costs
by approx. ¥60 bn
(until FY2021/22)
2015
2016
2017
2018
2020 +
(Fiscal years ended March 31)
Striking a balance between the pursuit of
capital efficiency and shareholder returns
We strive to secure an ROE of 10% or more by
conducting disciplined financial management while
satisfying external and internal requirements, including
responding to regulations, resource allocation to
businesses, pursuing of capital efficiency, and
maintaining financial and investment buffers.
At the same time, we are strengthening shareholder
returns. Since the fiscal year ended March 2014, in
addition to dividend payments, we have aggressively
engaged in share buyback programs. In April 2018, we
set a new total return ratio target, which includes
shareholder returns from share buybacks, at 50% or
higher to further clarify our corporate stance on
shareholder returns. We strive to maximize our corporate
value by striking a balance between shareholder returns
and investment in growth to be made with internally
generated growth capital.
Clarification of capital policy
Nov. 2017 Establishment of a policy for the
holding and retirement of treasury
stock
Upper limit of treasury stock holdings
Target at around 5% of outstanding shares
Retirement policy
In principle, retire treasury stock held above
upper limit
Apr. 2018 Establishment of total return ratio
Total return ratio that includes shareholder returns
from share buyback
more than 50%
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Financial and Non-Financial Highlights
Net revenue, non-interest expenses
Members of the Board of Directors (June 30, 2018)
25
In the fiscal year ended March 31,
2018, we recorded an increase in
net revenue, due to strong results
by the Retail Division and Asset
Management Division. An
increase in the overall expenses
was attributable in variable
expenses such as “compensation
and benefits” and “commissions
and floor brokerage,” which
resulted in an increase from
growth of revenue and transaction
volume, and provision of
allowance for legacy transactions.
(billions of yen)
2,000
1,500
1,000
500
0
852
787
312
Net revenue
Non-interest expenses
1,814
1,557
1,576
1,604
1,451
1,536
1,396
1,403
1,497
1,151
1,131
1,092
1,046
1,037
1,195
1,257
1,231
1,169
1,080
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
Income (loss) before income taxes, Net income (loss) attributable to
Nomura Holdings shareholders, and effective tax rate
We recorded income before
income taxes of ¥328.2 billion in
fiscal year ended March 31, 2018,
which increased slightly from the
previous year. By region, business
in Japan increased its income
before income taxes, but
overseas business recorded a ¥0.7
billion loss before income taxes
due to a decline in fixed income
revenue by a low-volatility in bond
market, and provision of allowance
for legacy transactions. As a result,
the effective tax rate rose to 31.7%
and net income attributable to
Nomura Holdings shareholders
decreased from the previous year.
(billions of yen)
400
200
0
-200
-65
-68
Income (loss) before income taxes
Net income (loss) attributable to Nomura Holdings shareholders
Effective tax rate (rhs)
(%)
70
362
347
323
328
238
214
225
240
219
35
105
68
93
85
12
29
107
165
132
0
32%
-800
-780
-708
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
ROE and EPS (Diluted net income (loss) attributable to Nomura Holdings shareholders per share)
Our 2020 management vision is to
create an organization capable of
consistently delivering EPS of
¥100 under any market
environment, which equates to
approximately 10% in ROE. EPS
decreased from the previous year
to ¥61.88 in the fiscal year ended
March 31, 2018. However, our
long-term management vision
remains unchanged. We will strive
to work on the two strategic
challenges of “transforming
business model in Japan” and
“improving profitability of
international business.”
(%)
10
5
0
(yen)
100
50
0
ROE
8.9%
8.6%
8.7%
7.9%
3.7%
4.9%
1.4%
0.6%
4.9%
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
EPS
55.81 60.03
65.65
61.88
35.52
21.59
7.86
3.14
28.37
-50
-35.57
400
-366.16
The Board of Directors comprises a
majority of Outside Directors, which
enables it to conduct highly
transparent management while
enabling oversight based on outside
perspectives. The Nomination
Committee has established the
Independence Criteria for Outside
Directors to ensure that Outside
Directors are sufficiently independent
from the Group.
Percentage of Outside
Directors
60%
Number of
Outside Directors
6 of 10
We place importance on the diversity
of the Board of Directors in order to
allow business execution to be
supervised from various perspectives
and to improve effectiveness.
Directors of various nationalities,
genders, and backgrounds utilize
their extensive experience in a broad
range of fields to make decisions on
important management matters, and
to provide management oversight.
Percentage of
non-Japanese Directors
20%
Number of non-
Japanese Directors
2 of 10
Women in managerial positions
We promote initiatives globally to support women
in improving their careers, including training
programs to help managerial candidates design
their careers, a mentoring program for managers,
a sponsorship program in which executive officers
support management candidates, along with
various other measures.
Ratio of employees by region
Nomura Group boasts a network consisting of
business sites in more than 30 countries and
regions staffed by employees of approximately
90 different nationalities. To offer clients a broad
range of products to address diverse investment
needs, it is important that personnel of different
ages, genders and nationalities continue to
create new value-added utilizing their unique
backgrounds. These diverse personnel are our
greatest asset.
Education and training expenses
We are establishing and enhancing human
resources development systems to enable
employees with diverse backgrounds and values
to better display their talents. In addition to
offering equal employment, we provide
appropriate, performance-based evaluations and
feedback. Also, we help employees proactively
build their careers by providing fulfilling
educational and training programs for all
personnel ranks.
Sustainability bonds
Nomura offers products that serve as a bridge
between investors that seek to contribute to
society through investment, and projects and
financing needs aimed at resolving social and
environmental issues. Nomura also promotes
initiatives aimed at achieving Sustainable
Development Goals (SDGs).
Number of women in managerial positions (lhs)
Percentage of women in managerial positions (rhs)
1,370
1,405
1,503
1,234
15
16
15
16
1,055
1,031
13
13
(%)
20
15
10
5
0
2013
2014
2015
2016
2017
2018
(End of March)
Japan
Europe
Americas
Asia and Oceania
20
9
14
20
9
13
23
9
12
24
8
12
23
8
11
24
9
11
57
58
56
56
58
56
26
1,600
1,200
800
400
0
(%)
100
75
50
25
0
2013
2014
2015
2016
2017
2018
(End of March)
(millions of yen)
3,000
2,972
2,880
2,987
2,767
2,441
2,515
2,250
1,500
750
0
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
(billions of yen)
500
Proceeds (lhs)
Bonds issued (rhs)
20
(Bonds)
20
499
8
110
400
300
200
100
0
9
54
221
5
4
52
5
59
16
12
8
4
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura
Special Feature
Special
Feature
Expanding services tailored to
clients’ life stages
Nomura strives to be a trustworthy partner to its clients and to support each one in the present
and future as 100 year lifespans are not uncommon.
The following figure shows how assets scale in step with various life stages by displaying
asset size on the vertical axis and age across the horizontal axis. After employment, asset
sizes increases toward retirement, notwithstanding expenditures for major life event along the
way including a home purchase and school fees for children. The Retail Division is working to
offer services and build a system that suit customer objectives at different life stages in order
to help them build assets throughout their lifetime.
Provision of services and development of systems according
to life stage and asset scale
Assets
3
C ase
01
Offering services for people
building their assets
NISA, accumulated-type NISA and iDeCo are
programs for persuading people to build assets by
means of long-term, diversified and accumulated-type
investments. As needs of building assets are
increasing, the Retail Division is working to increase
the number of accounts.
Meanwhile, Retail Division is strengthening services
provided on a non-face-to-face basis to satisfy a broad
range of customers, and integrated Nomura Home
Trade and Nomura Net & Call services into Nomura
Online Service in January 2018. Additionally, the Retail
Division upgraded the Nomura Goal-Based robo
advisory service to make it easier to use for asset
building customers with little investment experiences.
C ase
02
Offering services tailored to
the anxieties of senior customers
and their families
Senior customers face a broad range of anxieties
associated with matters not only health, nursing care,
funerals and graves, but also asset succession,
including those about inheritance, wills and donations.
To address those anxieties, the Retail Division has
expanded its consulting functions for inheritance- and
donation-related services, such as testamentary trust,
wrap trust, insurance and donations, in partnership
with Group companies and other parties. It has also
expanded the system of Heartful Partners, who
support the anxieties of senior customers and their
families, to all branches of Nomura Securities in Japan.
Furthermore, Happy Life Seminars are held for senior
customers for the group to be a good partner in the
approach for their various matters they will experience
in their old age and to support them enjoy their lives
after retirement.
27
1
2
Personal financial assets
Home loan
Children’s
school fees
Retirement
1
2
Age
3
Customer needs
Asset building
Preparations for the future
Desires to protect assets and pass
them down to the next generation
Preparations for long life
Asset management
Inheritance, M&A and business succession
Management of real estate and other assets that are not
financial products
Products /
services
Nomura’s systems /
platforms
Long-term diversified investment
(NISA, accumulated-type NISA and iDeCo)
ESOP
Robo advisory
Not on a face-to-face basis
Life Plan Service Department
Defined Contribution Pension
Plan Department
Financial products
Inheritance and insurance
Financial Partner Section
Living Partner Section
(Yuto Retire, Heartful Partner)
Case 01
Case 02
Financial products
Inheritance, M&A and insurance
Real estate
Operating leases
On a face-to-face basis
Wealth Management Department
Wealth Partner Section
S&S Department, PB Business Department and Corporate
Business Development Department
Trust Bank and Insurance Business Department
Nomura Institute of Estate Planning
Real Estate Business Department
Nomura Babcock & Brown Co., Ltd.
Not on a face-to-face basis Nomura Online Services
LINE Securities Corporation
Case 03
C ase
03
Alliance
with LINE Corporation
Nomura Holdings signed a joint venture contract to
establish LINE Securities Corporation with LINE
Corporation and LINE Financial Corporation in May
Japan population: 126.7 million*1
2018. Through this joint venture, Nomura aims to offer
brokerage and investment consulting services to asset-
building clients on a non-face-to-face basis, making
the most of LINE’s user base of more than 75 million
people and the financial business knowledge
accumulated by the Nomura Group.
28
Securities accounts:*3
24.2 million
Nomura Securities*4
5.32 million
LINE
MAUs in Japan*2
75 million
1.52
million
0.62
million
DAU/ MAU ratio*5
85%
Nomura Securities
ESOP members
Nomura
Securities DC
plan members
50 years
and older
26.0%
40 to 49
years old
22.8%
35 to 39
years old
30 to 34
years old
25 to 29
years old
20 to 24
years old
15 to 19
years old
11.4%
10.8%
10.0%
9.3%
9.7%
Asset builders: *6
74%
*1 As of November 1, 2017, the Statistics Bureau of the Ministry of Internal Affairs and Communications *2 Monthly active LINE applications users as of March 2018 according to a
survey conducted by LINE Corporation *3 Their number as of December 2017 according to data released by the Japan Securities Dealers Association. The number of securities
accounts is the sum of such figures at the end of October for companies that close accounts in January, April, July or October and the same figures at the end of November for
companies that close accounts in February, May, August or November. *4 Client accounts with balance as of March 2018. *5 The ratio of DAUs (daily active users or users who
used LINE services at least once each day) to MAUs (monthly active users) in Japan as of March 2018 *6 The composition of LINE users is based on an Internet survey Macromill, Inc.
conducted on a sample population of 2,060 LINE users nationwide aged 15 to 69 in January 2018.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Special Feature
Special
Feature
Implementation of Innovation
Initiatives
The long-term management vision for 2020, Vision C&C, refers to creating a robust operating platform
capable of delivering consistent growth in any market environment, aiming to adapt to a highly uncertain
environment in which common knowledge and business models may change considerably. We believe
that these objectives cannot be fulfilled without innovation. To evolve into an organization that will
continue to promote innovation, Nomura Group will work as one and take actions aiming to offer higher
quality services and to create businesses that serve as new sources of revenues for the Group.
Channel
Product or service
Infrastructure
Implemented
Under consultation
Smart speaker
LINE Securities Corporation
29
Adding
on value
8 Securities
Digital Asset Custody Platform
Financing scheme for business ventures
Funds-i
SNS x AI Business
Confidence Index
Nomura Goal-
Based Services
my daiz™
Algorithm trading
Developing unlisted
stocks market by
leveraging Shareholders
Community system
Continuous
innovation
iPad
Remote store
Mago Channel
Shinjuku Base
(a base for real-digital integrated
marketing measures)
Increase in
operation
efficiency
Demonstration trial of
natural language
analysis in investment
decisions
Distributed ledger technology
R3: a consortium engaging in research,
development and other activities on
blockchain technology for financial
institutions
Internal chat tool
Symphony
a cloud-based
communication
service
Robotic Process
Automation (RPA)
Automation of
operations to
improve efficiency
by using robots
Chatbot
a tool for
streamlining
internal inquiries
Abnormality
detection system
Business
Intelligence (BI)
Making decisions
efficiently by
analyzing internal
data
We will develop new
businesses and promote
innovation for Nomura’s
future, without fear of failure
Destructive innovation
N-Village
(a subsidiary specializing in developing new
business and in advancing open innovations)
ibet (a new platform that link issuers with investors)
My Rate (a credit information platform for peer-to-peer (P2P) transactions)
N-Village
CSO
Toshinori Sasaki
Research
Implementation
of framework
SoundHound
(a voice interaction engine)
Quantum computing
Nomura Group has been taking actions on innovation since the launch of Financial Innovation
Office in December 2015. Including the establishment of a subsidiary engaging exclusively in
developing new business and setting up overseas innovation base, these actions are
conducted in collaboration between regions and between divisions under control of the Group
CEO. The Group CEO emphasizes the importance of continuing innovation activities across the
Group and stress the significance of innovations that involve not only persons within the Group
but also outside contributors in an effort to advance open innovation.
30
N-Village is a company established in April 2017 as a wholly-owned
subsidiary of Nomura Holdings. Its mission is to create businesses that
could become new sources of revenue for Nomura Group over the medium
to long term, without being limited to financial services. Its activities began
in earnest in July 2017 when its office was set up with three members.
These three members are the president, who has helped a number of IT
start-ups with their IPOs in Nomura’s Wholesale Division, an IT
infrastructure engineer from Nomura Research Institute (NRI) who loves
hackathons, and me, someone who has been involved in consulting at
SAP and debt, equity, and securitization underwriting and development at
Nomura Securities. To accelerate open innovation, we are joined by
multiple other people , such as business venture entrepreneurs with a
wealth of ideas, on a part-time basis.
Large companies may think of helping start-ups, but truly competent
business executives and engineers possessing a wealth of ideas are not
worried about financing and do not need financial support. They have an
approach of working together on something interesting that will change the
world. Our team is working on prototype services in order to create a
society where anyone can try something. We are tackling goals such as
the construction of a credit platform in the peer-to-peer (P2P) capital
market, in the token economy using blockchain technologies, in the sharing
economy, and in the digital market. We are based in Shibuya, far away from
Nihonbashi and Otemachi where the other Nomura Group companies have
their head offices, in order to ensure that we can carry out our activities in a
corporate culture that differs from that of the Nomura Group. We can make
quick decisions regarding collaborative efforts with start-ups and this will
allow for repeated trial and error. We have close communications with
Nomura Holdings’ Group CEO, Mr. Koji Nagai, and the rest of the
management team, and work at the speed of business start-ups in a bid to
respond to their call to develop the last thing that the competition wants to
see developed by Nomura. My personal aspiration is to cut the cost of
transactions in the capital market to one-hundredth of the current level.
That will not be easy but I will be striving to achieve it.
* Software development events involving programmers, graphic designers, user interface designers and others.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura At a Glance
Business
segments
In addition to Retail, Asset Management and
Wholesale, we established a new Merchant
Banking Division in January 2018. Through our
principal investment business, we primarily
provide equity to clients as a solution for business
reorganizations and revitalizations, business
succession and management buyouts. By
connecting markets East & West, we provide
services to meet the needs of individuals,
institutions, corporates and governments through
our four business divisions.
Retail Division
Asset Management Division
Wholesale Division
Retail Division provides a broad range of financial
products and ser vices to individual and corporate
clients in Japan through its nationwide network of 156
branches, as well as online platform and call centers.
Wealth Management team, a part of the Retail Division,
specializes in providing personalized services to high-
net-worth individual in Japan and the rest of Asia.
Asset Management Division operates globally, with
Nomura Asset Management playing a central role.
Investment trusts business offers a wide lineup of
products through a broad range of channels.
Investment advisory business provides high-quality
products and asset management services to a broad
spectrum of institutional investors.
Wholesale Division consists of two businesses: Global
Markets providing financial products and solutions and
secondary market liquidity, and Investment Banking
offering capital raising transactions and advisory services.
It provides diverse services to a broad range of clients
including corporates, government entities and financial
institutions in Japan and overseas.
Income before
income taxes:
¥103.1
billion
Retail client assets:
¥117.7 trillion
Number of branches:
156
(As of June 30, 2018)
Income before
income taxes:
¥66.2
billion
Assets under management:
¥50.0 trillion
Share of ETFs in Japan:
46%
Source: The Investment Trusts
Association, Japan
Income before
income taxes:
¥100.6
billion
Countries possessing
the Primary Dealer qualification
World’s major markets
15 countries
Japan ECM League Table
1st / Share 24.2%
(April 2017 ~ March 2018)
Source: Thomson Reuters
31
• Individual investors
• Regional government
agencies
• Regional financial
institutions
• Corporates
• Educational institutions
• Other legal entities
Clients
• Sales of financial
products
• M&A advisory
• Real estate (agency
services)
• Inheritance and business
succession services
Our
Services
• Individual investors
• Domestic and overseas
pension funds
• Governments and central
banks
• Institutional investors, etc.
Clients
• Development of
financial products and
asset management
Our
Services
• Direct sales of services
to some investors
Clients
• Financial institutions
• Institutional investors
• Corporates
• Governments and
government entities
Our
Services
32
• Underwriting of bonds
and stocks
• M&A advisory
• Syndication of financial
products
• Proposal for investment
• Provision of liquidity
• High-level execution
Overview of
regions
Asia and Oceania
One of the Nomura’s strengths is its global
business platform.
By collaborating closely across businesses and
regions, we are able to provide optimal solutions
to meet the needs of our clients.
Americas
Employee
28,048
people
*1 Income before income taxes is for FY2017/18, and the remaining figures are as of March 31, 2018, unless otherwise defined
*2 Includes Powai office in India
Europe
Japan
Europe
Americas
Asia and Oceania*2
Japan
15,819
people
3,057
people
2,362
people
Japan has been the home
base of the Nomura Group
for 92 years since it was
established in 1925.
The Group provides a full
range of financial services to a
broad range of clients through
its Retail, Asset Management
and Wholesale Divisions.
Europe is the world’s second-
largest financial market, after
the Americas.
In this region, the Wholesale
Division is focusing on
businesses of strength,
including Macro (Rates, Foreign
Exchange), M&A advisory and
solutions, while also controlling
costs to improve profitability.
Americas is the largest
financial market in the world
and a key strategic region
for Nomura. The Wholesale
Division is looking to grow its
market share by allocating
management resources
to areas where we have a
competitive edge.
In addition, the Asset
Management Division has
been increasing assets under
management, mainly in high-
yield bond products.
6,810
people
We define Asia, including
Japan, as our home market.
It is in Asia ex-Japan, where
high economic growth
is expected. We are well
poised to capitalize on this
growth as our business, led
by our Wholesale and Asset
Management Divisions,
operates in 12 countries and
regions across the region.
In addition, we also have an
overseas Retail business.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Business Divisions: Retail Division
Retail Division
Review of
FY2017/18
It was a slow start to the year as mounting geopolitical risk affected investor sentiment. However, equity markets rose
in the second half of the year, supported by strong Japanese and U.S. economic indices. In line with a turnaround in
investor sentiment, stock transactions and investment trust sales increased. For FY2017/18, net revenue was ¥412.9
billion and income before income taxes was ¥103.1 billion, reflecting improvements from prior year.
The Retail Division continued to expand its consulting services and pursue its ambition to counsel each client about their
individual concerns and requirements, with the goal of providing optimal investment solutions. Retail Client Assets grew to
near a record high level which reflects our growing client trust.
Largest branch network and client
base across Japan’s securities sector
Approaching clients’ core assets, in
addition to investment assets
Ability to prepare and deliver best-in-
class investment advice
Relatively high sensitivity to market
fluctuation
Sophisticated consulting services
Building relationships with family
members of elderly clients
Leverage capabilities across the
Nomura Group to offer clients
differentiated services
Increasing new, younger clients
Training consultants whom clients could
completely trust
Building stable earnings structure by
increasing recurring revenues
Enhancing products and services aimed
at elderly clients and their younger
family members
Enhancing content targeted at younger
generations (websites, seminars, robo
advisor services, etc.)
Widening the lineup of products that
asset building clients can easily invest in
Business
Performance
(billions of yen)
600
450
300
150
0
Net revenue
Income before
income taxes
402.0
388.3
392.4
397.9
350.3
291.9
511.9
476.5
435.6
412.9
374.4
192.0
161.8
122.3
113.4
101.2
63.1
100.6
127.6
74.8
103.1
18.2
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
Actions
to
create
value
Medium-term strategies
Market Conditions and KPI Targets for 2020
Asset management needs are growing as interest rates
remain low. Also, advancement of aging society makes our
client needs more diversified, such as the needs to
prepare for a lifespan of 100 years and for passing down
assets to the next generation. Under these conditions, the
Retail Division is working to change its business model
and aspires to expand the business through enhancing
client trust and satisfaction. Our key performance indicator
(KPI) targets for FY2019/20 are client assets of ¥150 trillion
and recurring revenue of ¥150 billion. Through these
targets, we aim to establish a stable revenue stream that is
not susceptible to the market.
To meet these targets, we executed an organizational
change in accordance with the clients’ needs in the last
fiscal year. We are also working to enrich different services
in order to provide comprehensive solutions for clients’
assets, covering not only asset management but also
inheritance, business succession, M&A and real estate.
The annual customer satisfaction survey was conducted
for the year as well. We will introduce a range of
improvements based on clients’ wishes in a bid to increase
their satisfaction.
Retail Division’s KPI targets for achieving the
management vision for FY2019/20
Image of revenue composition
Other
512
22
FY2013/14
KPIs for FY2019/20
Income before
income taxes
¥192 billion
¥195 billion to
¥205 billion
Retail Client
Assets
¥91.7 trillion
¥150 trillion
Brokerage revenue
417
Recurring
revenue cost
coverage ratio
17%
Approx. 50%
Consulting related
revenue
Recurring revenue
19
54
FY2013/14
Revenue for
FY2019/20
(image)
Constructing a Revenue Structure Not Susceptible to the Market
Measures to Increase Recurring Revenue
Recurring revenue refers to revenue received from
ongoing services related to client assets such as
investment trust administration fees. The Retail Division
will provide investment trust and discretionary
investment through consulting services to accumulate
recurring revenue and consequently establish a
revenue structure that is not susceptible to the market.
To increase recurring revenue, we will continue to
broaden the lineup of investment trust products by
adding products in areas where rapid growth is
expected and in growing medium- and long-term asset
building. For discretionary investment, we will enrich
related services. From May 2018 onwards, clients are
able to have a maximum of eight Nomura Fund Wrap
and Nomura SMA accounts in total in accordance with
their purpose of using funds.
Actions for Discretionary Investment
2017
Launched the Nomura SMA trust with dividend
withdrawal function
2018 Launched the wrap trust
Launched funds for the refund of fixed
amounts and times
Changed the amount of reduction from
“¥1 million or more” to “¥10,000 or more”
Reduced the minimum contract amount of “SMA
(Executive Wrap)” from ¥50 million to ¥30 million
Launched accounts by purpose
500
(billions of yen)
30
270
50
150
Consulting related
revenue:
Approx. 10%
Recurring revenue:
Approx. 30%
34
33
Strengths
Challenges
Actions
Recurring
revenue
¥53.9 billion
Approx.
¥150 billion
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Business Divisions: Retail Division
Proposing comprehensive solutions for all
assets by counseling clients
For expanding consulting-related revenue
Consulting-related revenue refers to revenue from
insurance, real estate, M&A, underwriting and
financial consulting. We provide clients with high
value-added services for all their assets in addition
to existing services related to securities by taking
advantage of the Group function.
Insurance
10%
We create proposals for pension like schemes
taking into account client life planning and
inheritance measures by utilizing a gift-related
mechanism, which transfers assets to the next
generation through insurance.
Securities
13%
To meet clients’ various investment needs,
we offer a wide lineup of products including
stocks, bonds, investment trusts and
discretionary investment products. Along with
the advancement of an aging population with a
low birth rate, concerns about the succession
of companies’ own shares are increasing. We
make proposals tailored to client needs by
counseling them and their family members on
various issues.
Portfolio of households that hold
assets of ¥100 million or more
2%
Real estate
40%
We provide services tailored to clients’
needs such as inheritance, effective use and
investment together with our partner real
estate companies. Both numbers of handling
cases and the volume of services provided are
increasing steadily as we work on expanding
our partners and increasing our recognition.
Deposits
35%
To meet financing needs, we offer Nomura
Web Loan, loans secured by securities, in
addition to savings deposits, term deposits
and foreign currency deposits as financial
assets.
Source: Nomura, Statistics of the Ministry of Internal Affairs and Communications
“2014 National Survey of Family Income and Expenditure”
35
Actions Tailored to Clients’ Needs
Past Actions
New Actions
Organization and
HR strategies
Organizational change:
Abolished regional head system
Reorganization tailored to clients’
needs
Improvement of visit efficiency
Sales
strategies
Established Heartful Partner, a
specialist team for elderly clients
Research project on financial
gerontology
Product
strategies
Enhancement of low risk products
Discretionary investment services
Service
strategies
Anshin Furikae
(immediate money transfer at maximum of
¥300 million per day)
Web Plus Loan
Trial operation on Saturdays in some
branch offices
Established Heartful Partner, a
specialist team for elderly clients, at
all branches in Japan
Shinjuku Base, a new marketing
office, commenced activities
Provision of products in response
to the era of the 100-year life
Enhancement of discretionary
investment services
Expansion of banks where Anshin
Furikae is available
Mass retail
strategies
Employees' stock ownership plan (ESOP)
NISA, iDeCo
Enhancement of online services
Accumulated-type NISA
Tie-up with LINE Corporation
For resolving social issues
Launched the Mago
Channel service
In October 2017, we launched the Mago Channel service that provides
clients of Nomura Securities with connections to their family members
across generations and distance in collaboration with Chikaku Inc. Mago
Channel, an IoT product of Chikaku, is a communication tool which users
easily share the daily lives of family members and the growth of children
and grandchildren by projecting videos and pictures onto a TV screen using
a dedicated device and application. The structure of society continues to
evolve, driven by fundamental changes such as the aging of the population
and a shift away from multi-generation households to nuclear families.
Amidst such changes, we remain committed to supporting our clients in
achieving their financial goals, as well as seek to develop and introduce new
technologies which enrich our clients’ lives, bringing them closer together to
both their families and society.
36
Left: Receiver box of Mago
Channel
Right: Sample image of Mago
Channel
Financial gerontology
research
Actions from an asset
management perspective
towards a long-life aging
society
To have a comfortable life in retirement and pass assets on to the next
generation in the era of the 100-year life, individuals need to actively engage
in the formation and management of financial assets. However, we must
acknowledge that physical strength and the judgment necessary for asset
management fades with aging. Together with Keio University, Nomura
Securities launched a study on how to invest and manage individual
financial assets for longevity. Our proposals help ensure that we are a
financial institution at the forefront of Japan. The study has led to
improvement of our services through Heartful Partner, a specialist team for
aged clients.
Launched a joint
research on financial
gerontology*
Keio University
Comprehensive asset management services to help
clients extend asset life while also handling declining
cognitive function in aging
* Financial gerontology is a study of the impact of longevity and aging on economic and financial behaviors.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Business Divisions: Asset Management Division
37
Asset Management Division
Review of
FY2017/18
Our Asset Management Division saw net inflows of about ¥3.3 trillion in FY2017/18 due to growth in assets under
management of investment trusts including ETFs (Exchange Traded Funds) and investment advisory business, and
also through increased sales of UCITS* funds. As a result, total assets under management across the globe at the
year-end grew to a record-high ¥50 trillion.
For the year, net revenue was ¥127.3 billion, and income before income taxes was ¥66.2 billion. Income reached to its
highest level since FY2001/02, reflecting an increase in investment management fees driven by growing assets under
management as well as gains related to American Century Investments (ACI).
*Undertakings for Collective Investment in Transferable Securities (UCITS)
Strengths
Challenges
Actions
Investment management capabilities
covering the world and sophisticated
investment research capabilities
Further strengthening product
development capabilities to address
changes in market environment and
investment needs
Collaboration with ACI, and
enhancement of alternative asset
management strategy
Abilities to offer solutions addressing
diverse investor needs
Expanding our domestic client base
and overseas business footprint
Knowledge and talent to lead under
new industry challenges
Utilization of technology to create and
add value to the asset management
business
Delivering asset management proposals
to attract investors who have yet to
experience investment, and expand
offerings of UCITS funds overseas
Promoting the development of
advanced technology that could
strengthen the asset management
business
Business
Performance
(billions of yen)
160
120
80
81.1
80.5
62.1
51.9
66.5
65.8
68.9
Net revenue
Income before
income taxes
40
0
31.1
4.1
15.2
20.0
20.5
21.2
27.1
127.3
66.2
92.4
95.4
99.4
32.1
36.7
42.3
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
Actions
to
create
value
Medium-term strategies
Market Conditions and KPI Targets for 2020
The asset management industry is expected to continue
expanding steadily, bolstered by a combination of
expansion in global wealth and growth of emerging
economies. Along with the changes in clients’ investment
needs and heightening interests to investment costs,
competition is likely to intensify due to market entry by
other industries against a backdrop of the development
of technology.
In this environment, the Asset Management Division
steadily takes steps to achieve assets under
management of ¥55 trillion and income before income
taxes of ¥50-55 billion, which are KPIs for FY2019/20. In
particular, we provide solutions such as collaboration
with ACI, enhancement of alternative asset management
strategy and expanding offering of UCITS funds
overseas.
In addition, we take steps to expand our client base
through delivering asset management proposals to
attract people without investment experiences, and
promote the development of advanced technology that
could strengthen the asset management business.
Assets under management
(trillions of yen)
60
55
50
44
40
39
31
28
25
45
30
15
0
2012
2014
2016
2018
2020
KPI
38
(Fiscal years ended March 31)
Increase in demand for ETFs and passive investment approaches due to increased awareness of
investment costs
Heightened interest in specialized asset management products and alternative investments, in addition
to traditional equity and bond investments, that allow clients to aim for targeted returns while seeking
portfolio diversification
Rapid advances in digital technology, including the use of artificial intelligence (AI) and Big Data
Environment surrounding the asset management industry
Initiatives of Asset Management Division
Delivering outstanding performance based on sophisticated investment research capabilities
Distribution of solutions with our strengthened cooperation between sales and investment management
department to meet client’s needs
Utilizing in-house products as well as products of external investment managers in alternative
investments
Enhancement of ETF product lineup
Supplying products to iDeCo and
accumulated-type NISA, among
others
Promoting asset management to
people without investment
experiences
Provision of products through
collaboration with ACI
Expansion of UCITS fund assets
under management
Enhancement of proposals to
overseas institutional investors
Japan
Overseas
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Business Divisions: Asset Management Division
Utilization of digital technology
Rapid advances in digital technology, including the use
of artificial intelligence (AI) and Big Data, is a major
factor influencing the asset management industry to
determine competitiveness. Actions to utilize technology
are expected not only to strengthen our investment
capabilities, but also to improve productivity by pursuing
operational efficiency and generate momentum toward
creating new business opportunities.
In the Asset Management Division, “Innovation Lab” was
established by gathering talented technology experts to
enhance our asset management business by leveraging
advanced technology.
During FY2017/18, we began using AI to analyze data
such as analysts’ reports, to improve the accuracy of
investment decision making and to increase efficiency in
the investment process, as well as to develop new
investment strategies and automation techniques to
enhance operational efficiency. We are also pursuing
collaboration with partners such as universities,
research organizations and FinTech firms to build a
Function of
Innovation Lab
Innovation Lab
Nomura Asset
Management
39
Asset
management
Trading
Marketing
Business
operation
Model
(signal)
• Factor model
• Financial forecast
model
• Risk model
• Market structure
model
• Macro model
• Customer behavior
model
• Screening model
• Bankruptcy model
.
.
.
• Investment decision
barometer
• Trading timing
• Trading decision
.
.
.
.
.
.
Fund
(asset management strategy)
• AI fund
• Big data fund
System
(automation infrastructure)
• Robo-advisor
• Automatic ordering
system
• Risk management
system
• Fund management
system
• Operational support
system
• Documentation
system
Elemental
technology
• Financial theory
• Probability / Statistics
• Information
technology
• Processing of big data
• Artificial intelligence
• Text mining
Data
Existing numerical data
• Market data
• Financial data
• Macro data
Expanding numerical data
• Tick data
• POS data
Unstructured data
• Text data
• Graphics data
• Audio data
External
parties
Research
institutions
(University, etc.)
Venture
companies
Data
vendors
technology platform with an eye to the future.
In addition, while non face-to-face businesses using
mobile apps are expanding across various industries,
the Asset Management Division started offering Robo-
advisor services where expansion of growth is
expected. Combining our investment knowledge and
product development capabilities with mobile app
technology, we aim to build business attracting a wide
range of investors including people without investment
experiences.
We will continuously utilize the evolving technology to
create and add value in asset management business.
Contributing to the society through asset
management
Applying Nomura Asset Management’s corporate
philosophy, “Maximizing Value”, “Advanced
Expertise”, “Confidence and Responsibility”, we
continuously contribute to the society through
asset management. As a provider of investment
trusts, we deliver products and services to meet
the diverse needs of various investors, fitting with
their life stage, both in a face-to-face or in a
non-face-to-face setting.
Also, in addition to providing competitive
investment products to institutional investors
globally, we aim to accomplish a virtuous cycle
within the investment chain to contribute to
investors’ asset accumulation, and at the same
time, to contribute to the continuous growth of
companies which we invest in, by fulfilling our
stewardship responsibilities through constructive
dialogue with these companies and by exercising
proxy voting rights.
Anticipating structural changes in the asset
management business through the development
of technology, we put effort not only into the
development of investment strategies and
products, but also into developing a higher
standard of investment services to clients.
Based on these new challenges, we established a
corporate slogan, “Expertise to Exceed” that
captures the spirit of the corporate philosophy and
fits with the culture of the asset management
business. It expresses our determination to
exceed clients’ expectations by using our
expertise and foresight to pursue exceptional
performance and create cutting-edge solutions.
True to the spirit of this slogan, our Asset
Management Division will consistently capture
changes going forward and take initiatives with
flexibility to exceed clients’ expectations.
40
Nomura Asset Management’s
corporate philosophy
Maximizing Value
Advanced Expertise
Confidence and Responsibility
We established a corporate slogan that captures the spirit of the
corporate philosophy which fits the asset management company.
Corporate slogan for Asset Management division
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Business Divisions: Wholesale Division
Wholesale Division
Review of
FY2017/18
FY2017/18 commenced slowly as concerns around geopolitical risks weighed down on markets, but the latter half of the
year saw a recovery in equity markets activity as political concerns eased and supportive economic data emerged from
Japan and the U.S. The debt markets on the other hand experienced extremely low levels of interest rate volatility and
market participant activity was thin. Within such conditions, while the Wholesale Division recorded revenue increases in
Equities and Investment Banking, this was offset by a larger decline in Fixed Income, resulting in total revenue declining from
the previous year to ¥715.3 billion. As a result, income before income taxes totaled ¥100.6 billion.
The Wholesale Division continues to pursue improvements in productivity while maintaining strict risk discipline. Division
costs (dollar basis) have been reduced 25% compared to FY2011/12 while also delivering greater revenue stability.
41
Strengths
Challenges
Actions
Top-in-class industry presence in Asia-
Pacific region, particularly in Japan
Generating higher returns within a
tighter regulatory environment
Continue to align our portfolio to
changing market conditions and client
needs
Actions
to
create
value
Medium-term strategies
Market Conditions and KPI Targets for 2020
The operating environment of the Wholesale business
has undergone a significant structural shift as evidenced
by greater regulation of financial institutions, a transition
to passive strategies in the asset management business
and growing downward pressure on transaction fees as
digitalization continues to penetrate the market and we
anticipate the market will continue to experience further
structural change. Additionally, a shift in the composition
of the Wholesale fee pool has been observed over the
past two years, with a reduction in the proportion of
traditional sales and trading revenues and a shift toward
non-traditional business as corporations seek financing
and solutions and our clients increasingly pursue cross-
border business opportunities.
The Wholesale Division is engaged in the execution of
numerous initiatives to ensure that we optimally adapt to
the shifting market environment. In order to meet the
evolving needs of our clients, in April 2018, we
established the Client Financing & Solutions (CFS)
organization within Wholesale, bringing together critical
Global Markets and Investment Banking capabilities
under a unified organizational structure. Additionally, we
continue to pursue the expansion of our client base and
increase our capture of cross-border opportunity through
efforts such as further establishing our presence in the
U.S., the largest market globally from a fee perspective,
Composition of
Wholesale fee pool*
Advisory
10%
10%
Financing &
Solutions
31%
33%
* Source: Coalition; Advisory
includes M&A, Financing &
Solutions includes Traditional
& Non-Traditional Financing,
and Asset/Liability Derivative
Solutions; Traditional Trading
Business includes Liquidity
& Market Making & Agency
businesses across Fixed
Income and Equities
Traditional
Trading
Business
59%
56%
2016
2017
as well as undertaking strategic investments within the
market. We are also deploying technology initiatives such
as leveraging the application of machine learning in our
trading business in order to ensure we remain at the
technological frontier and to maintain step with the rapid
pace of technological advancement.
At the same time we continue to place great focus on
expense rationalization and risk control and we anticipate
these and other efforts to contribute to the achievement
of the Wholesale Division’s objective to record ¥200-220
billion in FY2019/20.
42
Relatively high sensitivity to market
fluctuations
Further strengthen risk culture and
discipline
Initiatives of Wholesale Division
Corresponding to changes in market
structure and competitor dynamics
Deliver growth through value-added
service to clients and selective
investment in growth areas
Enlarge Client
Revenues
Client Financing &
Solutions
P43
Americas Growth
Japan / Asia Connectivity
Robust international platform
Global client base across more than 30
countries
Facilitator of cross-border transactions
worldwide
Business
Performance
(billions of yen)
1,000
Net revenue
Income (loss)
before income
taxes
750
500
250
243.5
0
-163.6
-150.1
-800
-717.3
789.5
765.1
789.9
720.3
739.3
715.3
626.1
555.0
644.9
175.2
71.7
111.8
82.2
161.4
100.6
4.1
-37.7
15.4
Cost Optimization
Flow Trading Digitization
P43
Cost optimization
Average Costs (billions of USD)
Optimization & Efficiency
6.3
91%
Cost-to-
income ratio
5.4
~5.9
Cost savings from re-prioritization and streamlining of investment spend
across IT, operations and infrastructure
Cost reduction through shorter term optimization
82%
80%
Structural cost reduction & Self-funding growth
Medium term operating model optimization across front and back office
functions
Further structural simplification
Re-investment
Re-investment in businesses with underlying competitive strengths to
defend and grow
Investment to tap client opportunity in areas such as CFS, Advisory and
Agency
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
Historical
(FY13/14 to 15/16
average)
Current
(FY16/17 and 17/18
average)
2020+
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Business Divisions: Wholesale Division
Initiatives through CFS
The establishment of the CFS structure has allowed us to
realize the integration of the Wholesales Division’s
financing, structuring & solutions expertise into a single,
client-focused hub, which seamlessly partners with
various teams across our organization to deploy a
uniform client strategy to deliver value to our clients. This
centralized structure allows us to concentrate expertise,
deepen client penetration and enables the deployment of
a unified strategy across Wholesale.
While the shift in our clients’ needs toward a broader
range of financing, capital and hedging solutions is not
without its challenges, we believe it will also be the key
driver of Wholesale fee pool growth. Our organization is
well positioned to seize upon this opportunity.
Global Markets
Sales and Structuring
Client Financing &
Solutions (CFS)
Cash
Solutions
Client
Coverage
Critical mass of product specialists in CFS
Asset product solutions
Liability product solutions
Non-traditional / secured financing
Traditional financing
Investment Banking
Advisory
43
Leveraging digitalization
At Nomura, staying at the forefront of digital innovation is
a key priority for both the Group as well as the Wholesale
business. The emergence of new technologies and digital
assets are bringing fundamental transformation to the
market and Artificial Intelligence, Machine Learning and
Automation offer both revenue and cost opportunities
across our business.
In order to drive initiatives in this area we have recently
established the Wholesale Digital Office, which will lead
the implementation of technological innovation across
our platform to support superior price discovery, enhance
client services, drive greater productivity and efficiency
and build out our footprint in digital assets.
Through these and other ongoing initiatives, Nomura
ensures it is well placed to leverage digital innovation in
reinforcing our competitive position and providing
differentiated services to our clients.
AI Labs
Client Ecosystem
Fintech Engagement
Flow Sales & Trading
Digitalization
Data Strategy
Reprioritization of Technology
Focus
R
e
v
e
n
u
e
L
e
v
e
r
s
C
o
s
t
O
p
t
i
i
m
z
a
t
i
o
n
Develop AI solutions and advance their
practical applications in Wholesale business
Enhance client services through advanced
analytics
Partnerships or investments in relevant
start-ups across the value chain
Market share gains through enhanced
electronic offerings
Footprint optimization
Institutionalize enhanced accuracy and
consistency of data
Drive lower costs while enhancing
business product development
Contributing to the Smooth Operation of Markets
As an active participant in both primary and
secondary markets, Nomura’s Wholesale business
plays a key role in ensuring the flow of capital and
liquidity around the globe. Our efforts help
connect businesses seeking funding with investors
seeking investment opportunities, and our
readiness to provide liquidity to investors bolsters
confidence in the markets, contributing to the
smooth function of the world’s capital markets as
well as supporting innovation, the creation of jobs
and economic development.
Additionally, we offer a range of innovative
products and services which enable our clients to
flexibly meet the variety of challenges posed by
the introduction of the Corporate Governance
Code such as the need to dispose of cross
shareholdings and accessing funding while
minimizing equity dilution.
Fostering the Development of the Green/
Social Bond Markets
ESG (Environmental, Social and Governance) investing continues to gain momentum as the importance of
social and environmental issues continue to gain traction around the globe and Wholesale is actively
engaged in efforts to contribute to the development of these markets.
In Japan the Wholesale Division is actively
engaged in the development of the green/social
bond markets. In addition to establishing a
dedicated ESG bond team in 2017 to better meet
client needs, we underwrite various green/social
bond issuances such as Japan Railway
Construction, Transport and Technology Agency
Green Bonds and JICA (social) bonds, provide
guidance to prospective issuers of green/social
bonds and advise them regarding their own such
issuances.
Furthermore, Wholesale seeks to contribute to the
accumulation of knowledge and the development
of understanding of the green/social bond market
by market participants through a variety of
educational initiatives, such as participating in a
dedicated cross-sector green/social bond
research group established by Nomura Research
Institute, participating as a panelist in the
“Developments in the Green and Social Bond
Markets” seminar co-hosted by ICMA and the
JSDA in November 2017, and most recently,
co-hosting a green bond seminar together with
Bloomberg in May 2018.
(billions of USD)
200
Global labeled green bond issuance volume
150
100
50
170.9
102.2
51.2
37.3
Participated as a panelist in the “Developments in the Green and Social
Bond Markets” seminar in November, 2017
14.7
0
1.5
0.5
0.8
6.6
3.8
4.2
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Bloomberg NEF
For information on Nomura’s Green/Social Bond initiatives, to page 47-48
44
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura
ESG Initiatives
ESG Initiatives
ESG execution process
45
The Nomura Group reorganized the CSR Committee
chaired by an executive officer into the ESG Committee
chaired by the Group CEO in FY2018/19, in an attempt to
deal with issues related to ESG in ways that are more
strategic than before. Nomura Group executives in charge
of businesses and corporate affairs comprise the ESG
Committee. The Committee is responsible for developing
business policies on ESG-related risks and opportunities
for the entire Nomura Group and approving and deciding
on related activities. The activities of the ESG Committee
are reported to the Board of Directors and the Executive
Outline of the ESG Committee
Before
reorganization
After
reorganization
Chairman
Senior Managing
Directors
Group CEO
Meeting frequency
Once or more
Twice or more
Management Board as the occasion demands. The
Committee also examines the operations of specific
businesses that contribute to sustainable development
goals (SDGs) set by the United Nations. The now defunct
CSR Committee held one meeting in FY2017/18, but
Nomura Group requires the ESG Committee to hold two
or more meetings each fiscal year in a rule it set to increase
the frequency of governance.
ESG Committee members
Framework
Chairman
Koji Nagai
Representative Executive Officer, President and Group CEO
Vice Chairman
Tetsu Ozaki
Vice Chairman
Executive
Management Board
Board of Directors
Yuji Nakata
Satoshi Arai
Chie Toriumi
Executive Managing Director, Head of Group Entity Structure and Co-CRO
Chief of Staff and Group Strategy
Executive Vice President, NSC, Retail Division Business Strategy and
Management
Tomoyuki Teraguchi Head of Group Compliance
Junko Nakagawa
Executive Vice President, NAM, Risk Management, Business &
Infrastructure, Corporate Planning & Administration, Chief Risk Officer(CRO)
Approve
Report
ESG Committee
Approve
Report
Members
Takumi Kitamura
Executive Managing Director, Chief Financial Officer (CFO)
Yo Akatsuka
Global Head of Investment Banking
Yasushi Takayama
Chief Legal Officer (CLO)
Etsuro Miwa
Global Head of Human Resources
Paul Spanswick
Deputy Chief of Staff, Group CAO and Operations
Kenji Kimura
Banking
Hajime Ikeda
Group Head of Global Corporate Communications, Corporate Citizenship
and Tokyo 2020 Olympic and Paralympic
Attending Auditor Takehisa Yanai
Audit Mission Director, NSC
Secretariat:
Corporate Citizenship Department
Cooperation
Japan
EMEA
Americas
Asia
ex-Japan
Identification of Material ESG Issues
https://www.nomuraholdings.com/csr/group/index.html
External Assessment
https://www.nomuraholdings.com/csr/evaluations/
Fundamental
approach
The Nomura Group is proactive in its activities related to environmental, social and governance (ESG),
seeking to sustain its growth and address social issues, in addition to contributing to the development of
securities markets through business activities that fulfill its corporate social responsibility. At the same time,
Nomura Group is promoting and managing those activities throughout the Group in an appropriate manner
based on its awareness that initiatives on issues related to ESG contribute to society at large, including its
customers, and play an important role in maintaining and enhancing corporate value.
The basic policies on ESG are set forth in Our Founder’s Principles established by founder Tokushichi Nomura
II, the Code of Ethics of Nomura Group and its Basic Management Policy.
Code of Ethics of Nomura Group
https://www.nomuraholdings.com/company/basic/ethics.html
Inclusion in ESG indices
Nomura’s CSR initiatives have been widely recognized
outside the Company. Nomura Holdings has been
selected for inclusion in a number of SRI indexes,
including the Dow Jones Sustainability Indices (DJSI
World and DJSI Asia Pacific), the FTSE4Good Index,
STOXX Global ESG Leaders Index RI), FTSE Blossom
Japan Index (an ESG index for passive investment,
adopted by the Government Pension Investment Fund
[GPIF]) and MSCI Japan Empowering Women Index
(WIN).
46
Dow Jones Sustainability Indices
Dow Jones & Company and
RobecoSAM have jointly created the
world’s first sustainability equity
indices. Nomura Holdings is included
in the DJSI World as well as the DJSI
Asia Pacific.
FTSE4Good Index
FTSE Russell, a subsidiary of the
London Stock Exchange, has created
this socially responsible investment
index by selecting excellent
companies from around the world.
STOXX Global ESG Leaders Index
STOXX Limited, a wholly-owned
subsidiary of Deutsche Börse Group,
has established this global SRI stock
index, comprising companies that meet
strict ESG assessment standards.
MSCI Japan Empowering Women Index (WIN)
U.S.-based MSCI, Inc. has created
this index by selecting companies that
promote and maintain gender
diversity, based on scoring using data
and disclosed corporate information
on female employment, disclosed
according to the Act on Promotion of
Women's Participation and
Advancement in the Workplace.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Contributing to Sound and Sustainable Capital Markets
Green bonds: Japan Railway Construction, Transport and Technology Agency (JRTT) bonds
and Nederlandse Waterschapsbank (NWB) bonds
The Paris Agreement negotiated at COP21 (The 21st
Conference of the Parties to the UN Framework
Convention on Climate Change), aims to keep the global
temperature rise this century well below 2 degrees
Celsius. Green bonds are issued to fund projects aimed
at connecting issuers’ activities with the 2°C goal and
they are becoming more recognized is not only in the
expanding overseas market but also in the Japanese
market. In November 2017 and February 2018, Nomura
Securities underwrote and sold green bonds issued by
Japan Railway Construction, Transport and Technology
Agency, as lead manager. The proceeds from the
issuance of these bonds will be appropriated to the
construction of new railway lines (Eastern Kanagawa
Lines) that are considered effective for reducing carbon
dioxide emissions. Moreover, Nomura Group is
proactively underwriting and selling green bonds
overseas. In November 2017, Nomura International acted
as lead manager and underwrote and sold in the euro
market euro-denominated green bonds issued by
Nederlandse Waterschapsbank (NWB), a public financial
Provision of research reports
institution in the Netherlands.
By supporting the development of green bond markets
that provide private funds to investments for the transition
to a low-carbon society, Nomura Group aims to respond
to diversified customer needs for financing and fund
management and to contribute to solving climate change.
A scene from the seminar “New Tide in Green Bonds”
jointly held with Bloomberg Finance L.P. in May 2018
Nomura Institute of Capital Markets Research (NICMR),
an independent research institute in Nomura Group, aims
to contribute to the development of financial and capital
markets and the financial services sector through
research and analysis of markets and systems in Japan
and overseas from neutral and objective standpoints, and
to disseminate its highly-specialized outputs both
domestically and internationally. NICMR has also been
bolstering its research on green bonds and ESG bond
markets. Its report “Initiatives for the Establishment of
Sustainable Finance in Europe,” analyzes and offers a
commentary on the “Sustainable Finance: Commission’s
Action Plan for a Greener and Cleaner Economy”
adopted by the European Commission in March 2018.
Nomura Securities' Fiduciary Service Research Center,
which provides asset management consulting services
to institutional investors such as corporate pensions and
public pensions, also issues reports on the topic of ESG
investment both in Japan and overseas. Going forward,
we will continue to provide information with a spotlight
on ESG as a part of our pension investment
management consulting.
48
Name of Report
Media
Issuer
Potential Use of Green Bonds as a New Financing
Source for Local Governments
Nomura Journal of Capital Markets
Winter 2017
Nomura Institute of Capital
Markets Research
Overview and Future Challenges of ESG Bond
Markets
Nomura Journal of Capital Markets
Spring 2018
Nomura Institute of Capital
Markets Research
Initiatives for the Establishment of Sustainable
Finance in Europe
Nomura Journal of Capital Markets
Spring 2018
Nomura Institute of Capital
Markets Research
Focal Points of Climate-related Financial
Disclosures for Institutional Investors
Nomura Journal of Capital Markets
Summer 2018
Nomura Institute of Capital
Markets Research
Social Bonds Attract Attention for Realizing a
Sustainable Society
Nomura Journal of Capital Markets
Summer 2018
Nomura Institute of Capital
Markets Research
Ideas to Formulate ESG Investment Policy
Fiduciary Research, June 2018
Fiduciary Management
Department, NSC
47
Fundamental
approach
Nomura Group believes that the social mission of the financial services sector is to contribute
to economic growth and sustainable social development by facilitating the appropriate flow of
funds in the capital markets through products and services that meet the needs of customers.
In addition, to fulfill our responsibility as a company that operates globally, we offer financial
services that contribute to addressing climate change and social issues and promote
initiatives aimed at achieving sustainable development goals (SDGs).
Sustainable finance
Contributing to sound and sustainable capital markets
ESG bond initiatives
ESG (Environmental, Social and Governance) initiatives in
corporate management are being scrutinized by
institutional investors and have led to a strong tendency
to view such initiatives as essential to enhancing
corporate value. Investment in equity products that
adhere to ESG principles has increased among
institutional investors as a method for focusing on new
corporate value, while ESG in fixed income investment is
still in the development stage. In 2017, Nomura Securities
assigned staff specializing in ESG bonds in the Debt
Capital Markets Department, one of the firm’s
underwriting divisions. In February 2018, Nomura Institute
of Capital Markets Research established a dedicated
research group, comprising outside experts, to focus on
the sustainable development of ESG bond markets. The
research group conducts research and studies measures
for the stable and sustainable development of ESG
bonds and markets in industry-government-academia
collaborations. We will continue to contribute to the
development of ESG bond markets.
Social bonds: JICA bonds and BPCE bonds
Social bonds are instruments issued under a framework
in which the proceeds are used to solve social issues. In
Japan, the Japan International Cooperation Agency
(JICA) has issued JICA bonds and Nomura Securities
provided support as lead manager. In January 2018,
Nomura Securities acted as lead manager and
underwrote and sold Social Samurai Bonds issued by
Groupe BPCE, France’s second-largest banking group.
The proceeds from the social bonds are planned to be
used for refinancing loans to customers of the local
banks in the group, particularly for those in education,
healthcare and other social activity areas.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Contributing to Sound and Sustainable Capital Markets
Nomura Asset Management’s initiatives for responsible investment
Promoting financial literacy to a wide range of people
49
Nomura Asset Management believes that, as an
investment management company trusted by clients
and society, its mission is to contribute to the
development of society through the asset management
business. In order to achieve this, we are actively
working on stewardship activities such as engagement
and proxy voting based on our fiduciary duty as a
responsible investor managing clients’ assets. In
particular, we emphasize ESG issues as a priority matter
of corporate social responsibility and sustainability, from
the perspective of an investment management
company. We engage proactively by understanding how
companies we invest in handle ESG issues and work to
ensure that they tackle such issues appropriately.
Concerning conflicts of interests, which we may face in
the course of investment management, we rigorously
maintain our independence, make sure not to harm the
interests of clients, and seek to maximize their interests
via appropriate execution of voting rights. In particular,
being a member of Nomura Group, comprising many
financial institutions active in different business areas,
Nomura Asset Management is exposed to potential
risks concerning various conflicts of interests within the
Group and therefore must make extra efforts to protect
the interests of clients. In September 2016, we
established the Conflict of Interest Management Policy
so as to appropriately manage transactions with
potential conflicts of interest.
Responsible Investment
https://global.nomura-am.co.jp/responsibility-investment/
Responsibility of institutional investors toward achieving SDGs
The growth of ESG investment is being accompanied by
investors’ tendency to more highly evaluate companies
aiming to share the United Nations’ Sustainable
Development Goals (SDGs) with society. If institutional
investors provide capital to such companies, and these
companies then use the capital for business expansion
as well as contribute to achieving SDGs in areas such as
the environment, hygiene, and education, this will
eventually lead to realization of sustainable corporate
growth and the building of a sustainable society.
Furthermore, if the outcomes of ESG investment are
allocated to investors in the form of investment returns, a
better cycle of a SDGs-related investment chain can be
created. Nomura Asset Management is committed to
helping build such an investment chain that creates a
virtuous cycle through ESG investment.
Virtuous Cycle targeted by Nomura Asset Management
Companies
Sustainable growth
Achieving
common goals
Common
goals
SDGs
Profit
Society
Building of a
sustainable society
Asset formation
Investment/Returns
Dialogue
Investment chain
Investment/Returns
Dialogue
Nomura
Asset Management
Acceptance situation of stewardship code
UK
By April 2017, Nomura Asset Management had signed
the stewardship codes of six countries and regions. In
the U.K., Nomura Asset Management U.K. is rated in the
highest tier, Tier1, by the Financial Reporting Council
(FRC) in its assessment of financial institutions based on
their execution of the U.K. Stewardship Code.
Japan
Hong Kong / Taiwan
Malaysia / Singapore
Increasing financial literacy leads not only to enhanced
asset formation and improved living standards, but also
contributes to the healthy development of capital markets
and the proper circulation of capital.
Nomura Group has been providing financial and
economics education to different generations of people,
so as to raise individuals’ knowledge and understanding
of finance and economics.
Financial and economics education to the next generation
Nomura Group has spearheaded efforts to provide
financial and economics education to young people in
Japan. We began hosting financial courses for
universities in 2001 and our employees in retail branches
across Japan serve as lecturers, visiting classes at
elementary, junior, and senior high schools nationwide.
Moreover, we are a special sponsor of the Nikkei Stock
League Contest and donate learning materials to schools,
providing economics and securities education
opportunities to young people.
Implementation
status of programs
Year first offered, number of
classes, participants, etc.
Cumulative record as of
March 31, 2018
Visiting classes
(elementary, junior, senior high
schools, universities, teachers)
Financial courses for
universities
Financial courses for the
general public
2008
2001
2003
Nikkei Stock League
2000
Number of
classes
Number of
participants
Number of
schools
11
653
17
Number of
participants
3,000
Number of
classes
171
Number of
participants
11,431
Number of
teams
623
Number of
participants
2,604
Number of
classes
Number of
participants
1,519
63,164
Number of
schools
1,864
Number of
participants
239,200
Number of
classes
8,120
Number of
participants
399,755
Number of
teams
Number of
participants
27,950
110,708
50
Providing financial knowledge to investors focused on building assets
Nomura Group has been holding a wide range of
seminars for new employees of private sector companies,
including investment education on employees’ share
ownership plans, defined contribution pension plans, and
accumulated-type NISA (Nippon Individual Savings
Accounts), as well as life-planning seminars for these
same employees. For public sector employees, we
provide financial literacy education, including lifelong
living plans, individual-type defined contribution pension
plans, and accumulated-type NISA. By providing
knowledge about money, which is necessary for a
satisfying life, and teaching the basics of asset
management, we will continue our efforts to “help enrich
society through our expertise in capital markets.”
Number of seminars held and number of participants
(Number of times)
1,500
Public offices
Number of participants
Private companies
(Number of people)
60,000
54,862
53,205
1,200
42,371
48,000
45,823
900
36,077
556
16,868
600
237
100
300
399
338
254
413
500
626
662
591
687
0
36,000
24,000
12,000
0
2012
2013
2014
2015
2016
2017
(Fiscal years ended March 31)
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura
Corporate Governance
Fundamental
approach
Nomura Holdings recognizes that the enhancement of corporate governance is one of the
most important issues in terms of achieving management's goal of enhancing corporate
value by deepening society's trust in the firm and increasing the satisfaction of stakeholders
beginning with clients. As a company with Three Board Committees structure, we have
separated management oversight from business execution. This separation of duties
strengthens the oversight functions and transfers authority regarding business execution from
the Board of Directors to the Executive Officers in a bid to accelerate the Group’s decision-
making process.
51
Corporate Governance
Corporate Governance System
General Meeting of Shareholders
Outside Directors
Inside Directors
Outside Experts
Election and dismissal
Oversight
Board of Directors
Directors
GCEO
Formulation of proposals for
election and dismissal
Audit
Determination of
compensation
Nomination
Committee
Audit
Committee
Compensation
Committee
(Full-time member)
Oversight
Delegation
of decision-
making authority
on business
execution
Determination of
compensation for
Executive Officers
Audit
Business execution
Group CEO
Executive
Management Board
Matrix
Management
across Four
Divisions and
Regions
Corporate
Group Integrated
Risk Management
Committee
Advisory Board
Internal Controls Committee
Internal audit (IA)
Board of Directors
A majority of the Board of Directors are independent
Outside Directors
Emphasis on diversity within the Board of Directors to
conduct oversight from diverse perspectives
Nomura Holdings has defined management oversight
as the primary task of the Board of Directors, and
maximizing corporate value in the medium and long-
term as their objective. To achieve a high level of
impartiality and transparency in management, the
Board of Directors has formulated the “Basic
Management Policy,” in which the Board of Directors
elects the Group CEO and other Executive Officers in
charge of corporate management, while also making
key decisions on our business execution.
For the purpose of properly performing its oversight
functions, our Board of Directors consists of 10 Directors,
Nomination Committee
six of whom are independent Outside Directors. It is
chaired by a Director who does not also serve as an
Executive Officer. To ensure active deliberations from
various points of view, it is composed of diverse
members in terms of nationality, gender, backgrounds
and other factors who have expertise in financial affairs,
corporate management and other areas.
Composition of the Board of Directors (as of July 1, 2018)
Executive officers
20%
Securities industry
experts
20%
Experts in finance-
related legal systems
10%
Company management
20%
Accountants
20%
Company management,
corporate accounting
experts
10%
Our Nomination Committee aims to establish an
appropriate management system throughout Nomura
Group. It evaluates proposals for the election and dismissal
of Directors to be submitted to the General Meeting of
Shareholders in consideration of their personality, insight,
values and knowledge and experience in their specialty
areas. We have established the “Independent Criteria” for
maintaining the independence of our Outside Directors
from the Group and ensure that none of the Outside
Directors have concurrent posts that would prevent them
from having enough time to fulfill their duties. However, we
acknowledge that they may have a maximum of three
additional posts at other companies.
Nomination Committee consists of three Directors who do
not also serve as Executive Officers, two of whom are
independent Outside Directors.
Details about the “Independent Criteria” for our Outside Directors
https://www.nomuraholdings.com/company/cg/data/criteria.pdf
52
Audit Committee
The purpose of our Audit Committee is to serve the Nomura
Group’s lawful, appropriate and efficient business
management. It exercises its statutory authority and deploys
the Independent Auditor and internal organizations to audit
the Directors’ and Executive Officers’ performance of duties
in terms of legality, appropriateness and efficiency, and
prepares audit reports. In accordance with the evaluation
criteria on independence and expertise, it determines
proposals regarding the election, dismissal and non-
reelection of the Independent Auditor and exercises its right
to grant approval for decisions on compensation and other
matters for the Independent Auditor. It works with the
Independent Auditor and the internal audit sections to
ensure proper auditing operations.
Our Audit Committee consists of three Directors who do
not also serve as Executive Officers. Two of them are
independent Outside Directors. All its members meet the
independence standards prescribed in the Sarbanes-
Oxley Act in the U.S. One of them is a financial expert
under this legislation.
Compensation Committee
Our Compensation Committee’s objective is to secure,
retain and motivate our personnel, which are the
greatest assets of Nomura Group. In order to establish
our solid position as a financial services group with a
global competitive advantage, the committee
formulates the “Compensation Policy of Nomura
Group,” the “Compensation Policy for Directors and
Executive Officers of Nomura Holdings, Inc.,” and
determines the compensation for individual Directors
and Executive Officers in accordance with these
policies. On the basis of the “Pay for performance”
principle, the committee combines internal analyses
with findings from those conducted by an outside
evaluating institution to heighten the degree of
objectivity and transparency. By using share-related
and other deferred compensation with predetermined
periods of restrictions to exercise rights, it seeks
alignment with shareholders’ interests and the
improvement of long-term incentives.
Our Compensation Committee consists of three
Directors who do not also serve as Executive Officers
and two of them are Independent Outside Directors.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Corporate Governance
Reinforcing the corporate governance system
Adopted Company with Three Board Committee
structure
Continued efforts to establish a system for transparent,
fair and strong-minded decision-making
While adopting a holding company structure and listing
on the New York Stock Exchange (NYSE) in 2001, we
introduced Outside Directors and established three
discretionary organizations, namely the Compensation
Committee, the Internal Controls Committee and the
“Advisory Board,” in which outside experts discuss our
Group’s management from various points of view.
In 2003, we became a “Company with Committees,
etc.,” which is now referred to as a Company with Three
Board Committees. Specifically, the Nomination,
Compensation and Audit Committees were established
with a view to clarify the separation between oversight
and business execution and improve transparency.
In 2004, the Code of Ethics of Nomura Group was
established to be observed by every single officer and
employee of the Nomura Group. We strive to fulfill our
responsibility to shareholders and all other stakeholders.
In 2010, two outside directors (one of them is female)
from abroad joined our Board of Directors, as we
continue to diversify our Board, and accounted with a
majority of outside directors.
In 2015, we established “Nomura Holdings Corporate
Governance Guidelines” to provide a mechanism for
toughening our corporate governance.
Apart from the Board of Directors, “Outside Directors
Meetings” were established in which they discuss
matters related to our business and corporate
governance. In addition, we invited Asian experts as
members of the Advisory Board, which is designed to
upgrade our corporate governance, helping us evolve
into an “Asia’s global investment bank.”
To achieve our continued growth and maximization of
corporate value in the medium-to long-term, we are
stepping up to further reinforce our governance system.
Nomura Holdings Corporate Governance Guidelines
https://www.nomuraholdings.com/company/cg/data/cg_guideline.pdf
Corporate Governance Report
https://www.nomuraholdings.com/company/cg/data/cg_report.pdf
Support system for Outside Directors and
use of knowledge
Establishment of system to support Directors in their duties
We have an Office of Non-Executive Directors and Audit
Committee within the organization to assist the Audit
Committee and Directors in performing their respective
duties. The office explains agendas in advance of Board
of Directors meetings for the Outside Directors, and
continuously presents our business details, business
plan, financial position, internal audit status and other
matters of significance to the governance system.
The Outside Directors are entitled to request
explanations, reports or materials from the Executive
Officers and employees whenever they are deemed
necessary, and to hire outside legal, accounting and
other experts at the expense of Nomura Holdings.
In addition, we are taking a variety of measures to enable
the Outside Directors to undertake in-depth deliberations on
matters related to our business and corporate governance
at the regularly held Outside Directors meetings.
Examples of actions
Basic policy for strategic shareholdings
Nomura Group has ongoing discussions concerning the
purpose of strategic shareholdings.
Regarding strategic shareholdings, we consider the risks
and costs involved in holding such shares and
perspectives of business strategy, such as opportunities
to increase the revenues of our businesses through the
expansion of transactions or business alliances with us
whose shares are held, and shall hold such shares only if
such shareholdings will contribute to maintaining/
enhancing the corporate value of the Nomura Group.
As a result of the discussion, concerning stocks whose
sale has been determined to be reasonable, we proceed
with the sale of such stocks while taking into
consideration the impact on the market and other
circumstances.
Above basic policy for strategic shareholdings and other
are written in Article 25 and Article 26 of the Nomura
Holdings Corporate Governance Guidelines.
The Outside Directors and other Directors participated in a two-day meeting of the Executive Officers and Senior Managing Directors to
discuss how Nomura should function in 2020 and beyond.
The members of the Audit Committee visited major overseas locations in London, New York, Hong Kong, and the Japan branches of
Kyoto and Osaka. They verified the business conditions, management vision, and the understandings of our strategy.
The chairman of Outside Directors explained our management of Board of Directors and Audit Committee through the investor briefing
session called “Investor Day.” We held a session for an Outside Director to speak to investors.
53
Nomura’s corporate governance initiatives
54
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Organizational
structure
Company with Board of Auditors
Company with Committees, etc.
Company with Committees (renamed after the enforcement of the Companies Act)
1
Company with Three Board Committees
(renamed after the revision of the Companies Act)
Number of Directors
12
(4 auditors)
11
(4 auditors)
Number of Outside
Directors
2
(2 outside auditors)
2
(2 outside auditors)
11
4
11
4
11
4
11
4
11
4
11
5
12
6
12
7
3
14
8
11
7
11
6
11
6
12
7
11
6
10
6
10
6
Ratio of Outside
Directors
Ratio of non-
Japanese Directors
Ratio of female
Directors
Committees under
control of the Board
of Directors
Measures in enhancing
efficiencies of Board of
Directors
Other advisory
bodies and
committees
Rules and guidelines
Toughening of
governance over
subsidiaries
17%
0%
0%
18%
36%
36%
36%
36%
36%
45%
50%
58%
57%
64%
55%
55%
58%
55%
60%
60%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
17%
29%
27%
27%
27%
25%
27%
10%
20%
8%
7%
9%
9%
9%
8%
9%
10%
20%
2001 Compensation Committee (voluntary)
2003 Compensation Committee
2003 Nomination Committee
2003 Audit Committee
Office of Auditors
2003 Office of Audit Committee*1
2006 Group Office of Audit Committee
2001 Established the Advisory Board as an advisory body to the Executive Management Board
2001 Established the Management Controls Committee (the Internal Controls Committee)
2008 Internal Controls Committee
1998 The whistle-blowing system “Compliance Hotline”
2
2004 Established the Code of Ethics of Nomura Group
2015 Evaluation of the Board of Directors (once a year)
2015 Regular Outside Directors Meetings
2016 Office of Non-Executive Directors
and Audit Committee*2
5
6
2015 Invited Asian experts to be Advisory Board members
4
2013 announced the Independent Criteria for Outside Directors
Established the Nomura Holdings Corporate Governance Guidelines
Established August 3 as “Nomura Founding Principles and Corporate Ethics Day”
2015
2015
Appointed Outside Directors for Nomura Asset Management from outside the Group
2015
2012 Appointed Outside Directors for Nomura Securities with no concurrent posts at Nomura Holdings
2
1
2003
Adopted a Company with
Committees, etc. structure
(now known as a Company with
Three Board Committees)
—
2004
Established the Code of
Ethics of Nomura Group to be
observed by every officer and
employee of Nomura Group
—
2010
Independent Outside Directors
accounted for a majority of the
Board of Directors
—
2015
Established the Nomura
Holdings Corporate
Governance Guidelines
3
4
5
Established
“Outside Directors Meetings”
(a meeting separated from
Board of Directors, where
matters such as the strategy of
Nomura Group and corporate
governance are discussed)
6
Inviting Asian experts
as member of “Advisory Board”
~structure of receiving advices
to become “Asia’s global
investment bank”~
*1 Organization supporting Audit Committee, and their members for audit execution
*2 Organization supporting duties of Directors including members of Audit Committee and Outside Directors
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Corporate Governance
Evaluation of the effectiveness of the Board of Directors
Compensation for Directors and Executive Officers
We have been conducting evaluations on the effectiveness
of the Board of Directors since the fiscal year ended March
2016. Each individual Director assesses the management
of the Board of Directors, including the quantity and quality
of information offered and discussions by the Board of
Directors. They also share their findings at Board of
Directors meetings and learn from the results in order to
continue strengthening their oversight function.
Giving these situations, the effectiveness of the Board of
Directors can be generally evaluated as a well-functioning
system. As a Company with Three Board Committees, we
make sure to secure the mobility of the execution, and
either during or outside of Board of Directors meetings, we
are enhancing the chances of utilization of all members’
expertise to further sophisticate our deliberating function
of Board of Directors.
PDCA cycle concerning effectiveness of the Board of
Directors
Each individual Director self-
evaluates their execution of duties
and the effectiveness of the entire
Board of Directors
The Board of Directors analyzes and
evaluates the effectiveness of the
entire Board based on inputs from
each individual Director
1
4
2
3
The results of the evaluation,
including the report on response
measures, are discussed at meetings
of the Board of Directors
Discussions based on issues that
can be handled by the Executive
Officers and proposals are submitted
to the Board of Directors
Evaluation items
Response to results
Constitution and management of the
Board of Directors
Information provision to the Board of
Directors
The Board of Directors’ involvement in
management goals and strategy
The Board of Directors’ function of
overseeing management
Internal controls system
Constitution and management of the
Nomination, Audit and Compensation
Committees
Monitoring of the state of dialogues
with stakeholders
Management of Outside Directors
Meetings, etc.
Reporting on the state of dialogues with investors,
analysts and other stakeholders to the Board of
Directors as appropriate.
Deliberation on matters relating to our business and
corporate governance through Outside Directors’
Meetings
We are enhancing our internal controls to ensure
appropriate corporate behaviors throughout the Group are
made in efforts to attain management transparency,
ensure efficiency, observe laws and rules, manage risks,
maintain the reliability of business and financial reports,
and encourage appropriate information disclosure. First,
we implemented risk controls in sales and trading
businesses, which are then reviewed and monitored by
risk management teams. They also encourage
development of management frameworks. Finally, the
Internal Audit department, which is independent from
business execution, conducts their internal audit. (This is
commonly referred to as the Three Lines of Defense
approach. See page 67-68 for details.)
The status of the implementation of internal audits is
reported to the “Internal Controls Committee” chaired by the
Group CEO and attended by members of the Audit
Committee. Deliberations of the Internal Controls Committee
are reported to the Board of Directors. The Audit Committee
collaborates directly with the Internal Audit department and
submits reports to the Board of Directors.
To strengthen the independence of the Internal Audit
department from business execution functions,
implementation plans, their budget formulation and the
election and dismissal of their heads require the consent
of the Audit Committee.
55
Structure of Nomura Holdings’ internal controls system
Election and dismissal
Group CEO
Business execution report
Report
Audit
Executive
Management Board
Internal Controls
Committee
Attendance
Internal audit
Report
Board of Directors
Nomination
Committee
Audit Committee
Compensation
Committee
Report
Report
Monitoring
Verification
Assistance to the
Audit Committee and
Directors
Office of Non-Executive
Directors and Audit
Committee
Departments engaged
in trading and sales
Departments engaged
in risk management
Internal Audit (IA)
First line of defense
Control
Second line of defense
Third line of defense
Independent Auditor
Independent
Audit
Note: Internal Controls Committee The Committee deliberates and determines matters regarding the establishment and evaluation of internal controls for the Nomura
Group’s business management structure as well as matters regarding the improvement of corporate behavior. Upon the consent of the Audit Committee, the Committee
approves the internal audit plan, the budget regarding the internal audit, and elects and dismisses the Head of the Internal Audit Division. The Committee is comprised of
Group CEO, person(s) assigned by Group CEO, member(s) of Audit Committee designated by the Audit Committee and Director(s) designated by Board of Directors.
As Nomura has adopted the “Company with Three
Board Committees” structure, the Compensation
Committee has established the Compensation Policy of
Nomura Group and the Compensation Policy for
Directors and Executive Officers. We ensure that the
Nomura Group’s compensation framework aligns with
our business strategy.
Compensation Policy for Directors and
Executive Officers
The compensation of Directors and Executive Officers
comprises base salary, yearly cash bonuses and
long-term incentive plans, and is determined by the
Compensation Committee based on this policy. A
portion of compensation may be deferred or paid in
the form of equity-linked awards. Equity-linked awards
have vesting periods to ensure that the medium-to
long-term interests of Directors and Executive Officers
are closely aligned with those of shareholders.
Adoption of Restricted Stock Unit program
From FY2017/18, we have adopted the Restricted Stock
Unit (RSU) as a deferred compensation program for
Directors, Executive Officers and employees of the firm
and its subsidiaries, in lieu of existing compensation
programs such as the issuance of stock acquisition rights.
Subject to certain conditions such as voluntary retirement
etc., Nomura will deliver shares of common stock to RSU
guarantees one to three years (up to seven years where
required by local regulations) after the RSUs are granted
mainly through disposal of treasury shares. Introduction
of RSU awards is intended to integrate the principles of
the Group’s deferred compensation program and to
further align the compensation program and the business
strategy with the medium-to long-term interests of
shareholders.
Compensation Policy of Nomura Group
To enable us to achieve sustainable growth, realize a
long-term increase in shareholder value, deliver added
value to our clients, compete in the global market, and
enhance our reputation, our compensation policy is
based on the following aims.
1
Align with Nomura’s values and strategies
2
Reflect group, divisional, and individual performance
3
Establish appropriate performance measurement
with a focus on risk
4
Align employee and shareholder interests
5
Appropriate compensation structures
6
Ensure robust governance and control processes
Compensation paid to Directors
and Executive Officers (FY2017/18)
56
Position
Number of
People*1
Basic
Compensation*2,3
(millions of yen)
Bonus
(millions of yen)
Deferred
Compensation*4
(millions of yen)
Total Amount Paid
(millions of yen)
Directors
(Outside directors)
Executive
Officers
Total
9 (6)
7
16
264 (124)
522
786
89 (–)
415
504
84 (–)
511
595
437 (124)
1,448
1,885
*1 The above number includes one Director who retired in June 2017. There were
8 Directors and 7 Executive Officers as of March 31, 2018. Compensation to
Directors who were concurrently serving as Executive Officers is included in that of
Executive Officers.
*2 Basic compensation of ¥786 million includes other compensation (commuter pass
*3
allowance) of ¥1.07 million.
In addition to basic compensation, ¥24 million of corporate housing costs, such as
housing allowance and related tax adjustments, were provided.
*4 Deferred compensation (such as stock options) granted during and prior to
the fiscal year ended March 31, 2018, is recognized as expense in the financial
statements for the fiscal year ended March 31, 2018.
*5 Subsidiaries of the Company paid ¥49 million to Outside Directors as compensation
etc. for their directorship at those subsidiaries for the fiscal year ended March 31,
2018.
*6 The Company abolished retirement bonuses to Directors in 2001.
Compensation for Directors and Executive Officers
https://www.nomuraholdings.com/company/cg/compensation.html
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Outside Directors of Nomura Holdings
Member of the Nomination Committee / Member of the Compensation Committee /
Honorary Company Fellow of Japan Tobacco Inc.
Member of the Audit Committee / Certified Public Accountant / Former
Commissioner of the Securities and Exchange Surveillance Commission
Under the strong determination of Nomura Group’s management team,
continuous efforts are being made to prevent past scandals from
occurring again. This is an on-going process, and I understand that it
is important to keep passing down messages from the management
team to every single staff member to prevent them from being careless.
The advantages of Nomura Group lie in the fact that the Founder’s
Principles are deeply rooted in its management, and that there are
experienced personnel adhere to these principles. In addition to
Nomura’s solid business footing in its home market, it has investment
capacity for the future and potential for growth overseas. On the other
hand, the challenges it faces are very clear. Nomura must respond
swiftly to the rapid aging of the population in Japan, stabilize the
revenue of its overseas business and constantly review and reconsider
the cost base. Clearly recognizing these challenges and advantages, I
will contribute to the further development of Nomura Group with the
use of the expertise that I have cultivated so far.
Nomura Group has established a well-organized corporate governance
system overall. In particular, outside directors form majority of the Board of
Directors, and they exchange opinions frankly at Board of Directors
meetings making monthly held Audit Committee meetings very meaningful.
Also I believe that the chairman and the full-time members of the Audit
Committee are very vigorous, and the existence of the Office of Non-
Executive Directors and Audit Committee and collaboration with the internal
audit sections are functional. On the other hand, to maintain effective
governance, it is vital to refresh the senses and maintain a degree of tension
without contenting ourselves with the status quo.
Nomura Group has an advantage of having a solid customer, personnel and
financial base as Japan’s largest securities company. Now, it is growing its
presence overseas. Under drastically changing economic circumstances, it is
necessary to direct the company soundly, and prevent its past strengths and
managerial resources from turning into negative legacies. Since Nomura is a
massive organization, it must make continuous efforts to ensure its corporate
philosophy and compliance are well communicated and observed by its current
staff. To build the foundations for this, I will contribute by using my expertise.
Hiroshi Kimura
Outside Director
Worked for Japan Tobacco Inc. as President, CEO and
Representative Director amongst other roles. In particular,
I succeeded in two large M&A projects and integrated
management for advancing globalization. I think that key
factors for success are concentration of managerial
resources, swift action, and diversity as a source of
competitiveness. I feel that these key factors are
consistent between Japan Tobacco and Nomura, even
though they are in different industries.
Mari Sono
Outside Director
As a certified public accountant, I am well aware of the
significance of appropriate disclosure and accountability
to stakeholders. I believe ascertaining and evaluating
corporate internal controls are the basic concepts of
auditing, and that this principle applies to outside
directors and members of the Audit Committee as well.
Member of the Nomination Committee / Member of the Compensation Committee /
Director & Chairman of AGC Inc.
Nomura Group’s strength lies in the basic principle of putting
customers first, which has been passed down from generation to
generation since its foundation. Moreover, its attitude toward
courageously developing new ideas, recognizing the necessity of
reforms and cultivating a strong sales team is impressive.
At AGC, the company that I am from, there are shared values of
seeking Innovation & Operational Excellence on the basis of Diversity,
Environment and Integrity. I have managed the company while
keeping these values in mind. Nomura Group operates its businesses
around the world under the corporate slogan of Delivering a Better
Tomorrow. I hope that my experience and values will bring a new
perspective to Nomura Group, and contribute to Nomura Group by
enhancing its business.
57
Former Executive Chairman of PricewaterhouseCoopers, Singapore
Nomura Group manages its operations through a matrix of business
lines and regional operations. Additionally, at top management level, it
also includes the Risk Committee as well as Internal Controls
Committee. This is further by oversight from the Board and its Three
Board Committees.
I believe the strength of Nomura Group is in the strong client base in
Japan and a growing base outside Japan. This combination gives it a
competitive edge. On the other hand, Nomura needs to be aware and
work on some issues, one of which is digital technology. The speed of
digital technological development is advancing at a rapid pace and
Nomura needs to be at the front end of the development such as
Fintech. As an outside director, I will fully support Nomura, a company
that works hard in solving and facing new challenges.
58
Kazuhiko Ishimura
Outside Director
Michael Lim Choo San
Outside Director
I worked for AGC Inc. as Group CEO after working in the
design and development section for production
equipment, production section, and as manager of the
electronics segment. Though the manufacturing and
financial institutions sectors are different, I believe there
are commonalities in managing in a way they both operate
globally.
I have been Executive Chairman of PricewaterhouseCoopers
Singapore, a professional services firm from which I retired
after serving more than thirty years. Additionally, I was
Chairman and Board Member for a number of organizations
including both Government agencies as well as listed
companies. From these experiences, I gained expertise in
audit, finance, corporate governance and regulatory
compliance in many different industries.
Chairman of the Audit Committee / Advisor of the IFRS Foundation Asia-Oceania Office /
Former Representative Director and Executive Vice President of Sumitomo Corporation
Nomura Group’s corporate governance system is not just a formal system.
The majority of members in the Board of Directors are Outside Directors
who participate in each committee meeting, ensuring effective management.
Effective management comes from good awareness of the management
executives. Never yielding to the business-first stance, Nomura aims to
achieve continuous growth on the basis of the principle of “Putting the
Customer First” as part of the “Founder’s Ten Principles” that were passed
down from founder Tokushichi Nomura. The strategies devised by the
executives are well communicated to the working-level personnel. I think
that this is why employees in Nomura in both Japan and overseas are
so competent and capable of expanding Nomura’s business globally.
Meanwhile, the hurdles that Nomura must clear to continuously increase its
corporate value are evident. This includes transforming its business model in
Japan and improving profitability in international regions. I think that we
can achieve continuous growth in any environment by tackling these issues.
As an Outside Director, I will perform checks and share my perspective on
corporate management developed at Sumitomo Corporation to contribute
by creating value to Nomura and boosting its competitiveness.
Noriaki Shimazaki
Outside Director
I have corporate management experience as
Representative Director and Executive Vice President of
Sumitomo Corporation. In addition, I have cultivated
extensive experience and knowledge of finance and
accounting by holding many different roles, including
being a member of the Business Accounting Council of
the Financial Services Agency and a trustee of the
International Accounting Standards Committee
Foundation.
Former Commissioner and Acting Chairperson of the U.S. Securities and Exchange Commission (SEC)
As one of the largest independent broker dealers in the U.S., Nomura
has a competitive edge over financial firms operating within a bank
holding company structure. Nomura is able to provide services that
banks are constrained from offering, as it builds out its investment
banking business. This will serve the firm well in expanding
opportunities to medium sized company businesses (within market
capital of $10 billion). Japan’s strengthening economy will attract those
companies looking for ways to participate in growth opportunities in
Asia where Nomura has the ability to play a major role, given the
company’s position in Japan and the Asian market.
As an outside director, I understand the global business challenges
Nomura faces. I will contribute to Nomura by providing insights into
U.S. market opportunities, including those resulting from regulatory
and / or legislative changes.
Laura Simone Unger
Outside Director
After working in the U.S. Securities and Exchange
Commission as a Commissioner and Acting Chairperson, I
served as a commentator for business news and as a
Financial Institution Consultant. These experiences have
enabled me to develop my expertise in the financial
services industry. During that time, I have also served as an
independent director on several public company boards.
This has provided me with the opportunity to become an
expert in corporate governance and business strategy.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Directors, Executive Officers and Senior Managing Directors of Nomura Holdings /
Outside Directors of Major Subsidiaries in Japan
Directors of Nomura Holdings (As of July 1, 2018)
Executive Officers and Senior Managing Directors of Nomura Holdings (As of July 1, 2018)
Chairman of the Board of
Directors
Chairman of the Nomination Committee, Chairman of
the Compensation Committee
Nobuyuki Koga
Director
Member of the Audit Committee (Full-time member)
Hisato Miyashita
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Outside Director
Member of the Nomination Committee, Member of the
Compensation Committee, Honorary Company Fellow
of Japan Tobacco Inc.
Hiroshi Kimura
Member of the Nomination Committee, Member of the
Compensation Committee, Director & Chairman of
AGC Inc.
Kazuhiko Ishimura
Chairman of the Audit Committee, Advisor of the IFRS
Foundation Asia-Oceania Office, Former Executive
Vice President of Sumitomo Corporation
Noriaki Shimazaki
Member of the Audit Committee, Certified Public
Accountant, Former Commissioner of the Securities
and Exchange Surveillance Commission
Mari Sono
Former Executive Chairman of
PricewaterhouseCoopers, Singapore
Michael Lim Choo San
Former Commissioner and Acting Chairperson of the
U.S. Securities and Exchange Commission
Laura Simone Unger
Directors who are concurrently serving as Executive Officers
Director, Representative Executive Officer, President and Group CEO
Koji Nagai
59
Director, Representative Executive Officer, Deputy President
Shoichi Nagamatsu
Outside Directors of major subsidiaries in Japan
(Nomura Securities Co., Ltd. / Nomura Asset Management Co., Ltd.)
Nomura Securities Co., Ltd.
Outside Director
Advisor Attorney of TMI Associates, Former
Superintending Prosecutor
Toshiaki Hiwatari
Outside Director
Former Chairman of the Board, Kao Corporation
Motoki Ozaki
Nomura Asset Management Co., Ltd.
Outside Director
Board Chairperson of NPO Triton Arts Network
Rikio Nagahama
Outside Director
Of-Counsel, Attorney-at-Law, Anderson Môri &
Tomotsune
Akiko Kimura
Executive
Officers
Representative Executive Officer, President and Group CEO
Representative Executive Officer, Deputy President
Vice Chairman
Executive Managing Director and Group Co-COO
Koji Nagai
Shoichi Nagamatsu
Tetsu Ozaki
Toshio Morita
Executive Managing Director and Group Co-COO, Head of Americas (based in New York)
Kentaro Okuda
Executive Managing Director, Head of Asset Management
Executive Managing Director, Chief Financial Officer (CFO)
Kunio Watanabe
Takumi Kitamura
Executive Managing Director, Head of Group Entity Structure and Co-CRO
Yuji Nakata
Senior
Managing
Directors
Retail
Head of Retail
Eiichiro Yamaguchi
Wholesale
Head of Wholesale and Global Markets (based in London)
Steven Ashley
Global Head of Investment Banking
Co-Head of Global Markets
Global Markets, Global Head of Equities
Yo Akatsuka
Yutaka Nakajima
Norikazu Akedo
Co-Head of Global Markets, EMEA (based in London)
Hideo Kitano
Head of Global Markets, Asia ex-Japan (based in Singapore)
Rig Karkhanis
Head of Global Markets, Americas (based in New York)
Jonathan Raiff
Merchant
Banking
Head of Merchant Banking
Masahiko Maekawa
Corporate
Chief Risk Officer (CRO) (based in London)
Chief of Staff and Group Strategy
Deputy Chief of Staff, Group CAO*1 and Operations
Chief Information Officer (CIO)
Head of Group Compliance
Chief Legal Officer (CLO)
Innovations
Group Head of Global Corporate Communications, Corporate Citizenship
and Tokyo 2020 Olympic and Paralympic
Global Head of Human Resources
Head of General Services
Group Strategy and Executive Office
Banking
Banking
Americas
Executive Chairman, Americas (based in New York)
Lewis O’Donald
Satoshi Arai
Paul Spanswick
Kaoru Numata
Tomoyuki Teraguchi
Yasushi Takayama
Chuzaburo Yagi
Hajime Ikeda
Etsuro Miwa
Rikiya Nonomura
Toru Otsuka
Kenji Kimura
David Findlay
Co-Head of Americas (based in New York)
Tsutomu Takemura
EMEA
Executive Chairman, EMEA (based in London)
Head of EMEA (based in London)
Asia ex-Japan
Executive Chairman, Asia ex-Japan; Head of China Committee; Asia
Strategy (based in Hong Kong/Singapore)
Yasuo Kashiwagi
Jonathan Lewis
Toshiyasu Iiyama
Head of Asia ex-Japan (based in Singapore/Hong Kong)
Vikas Sharma
Deputy Head of China Committee
Internal Audit
Group Internal Audit
Shinichi Mizuno
Shoji Ogawa
*1: Chief Administrative Officer
60
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura
Dialogue with stakeholders
To ensure sustainable
growth and to earn the
trust of society, we will
maintain good corporate
governance
61
Noriaki Shimazaki
Outside Director, Chairman of the Audit Committee
Advisor of the IFRS Foundation Asia-Oceania Office
Former Executive Vice President of Sumitomo Corporation
In May 2018, at a presentation held at our
head office in Otemachi, Chiyoda-ku, Tokyo
for analysts and institutional investors,
Mr. Noriaki Shimazaki, Outside Director
and Chairman of the Audit Committee,
made his first appearance explaining the
effectiveness of our corporate governance
and current status of the Audit Committee’s
activities. This was followed by a question
and answer session.
Questions and answers
Summary of the presentation
1
2
Improving the corporate governance
system of Nomura Group and the
effectiveness of the Board of Directors
Independence of the Board of Directors from the
business execution side and the Board’s objectivity
as a supervisory organization are ensured
A majority of the members of the Board of Directors
and the three committees (Nomination, Audit and
Compensation Committees) are Outside Directors
The Board of Directors is structured to emphasize
diversity and encourage multilateral discussion based
on the members’ experience and knowledge in their
respective fields
The effectiveness of the Board of Directors is
improved through the implementation of annual
self-evaluations and the PDCA cycle
Issues and remedies are identified (case examples)
Information is provided multilaterally (the Board of
Director receives reports on dialogues with stakeholders
on a continuous basis and attends meetings of the
business execution side to discuss medium-to long-
term management strategies, etc.)
Discussion among the Outside Directors is encouraged
(Meetings of Outside Directors are held on regular
intervals)
Initiatives of the Audit Committee
Audit policy of Nomura Holdings Audit Committee
Establish good corporate governance to ensure the
sustainable growth of the Nomura Group and to earn
society’s trust
Actively participate in the development and operation of
the internal controls system, and monitor and verify its
effectiveness
Enhance effectiveness and efficiency of audits through
collaboration with accounting auditors and Internal Audit
Monitor the effectiveness of group strategy by
implementing PDCA for group strategy at all levels
Audit Committee
Audit interviews are conducted with Group CEO, Group COO,
heads of business divisions, regional heads, directors, executive
officers, and other members of senior management
Financial reports by executive in charge of finance, reports
by Internal Controls executive and Internal Audit executive
responsible for risk management, compliance, etc.
Major audit activities of the full-time
Audit Committee member and Audit Mission Director
Audit interviews: Reporting from discussion with Senior Managing
Directors, Management Directors
Overseas on-site audits: Interviews with the management of
major sites and key staff members
Domestic on-site audits: Managing Directors of head and branch
offices, staff members in Japan
Cooperation with auditors
Monthly meetings with Internal Audit and Accounting Auditor
Cooperate with Audit Committee members in each region, Audit
Committees of subsidiaries, and statutory auditor
Reporting to the Board of Directors
Audit reports, reporting of the status of the execution of duties,
comments on audit findings
62
Q
&
A
Sell-side analyst
Overseas institutional investor
Sell-side analyst
“What is your evaluation of Nomura Group’s
arrangements and the provisions concerning lawsuits
and cases of legal disputes with authorities?”
“There is a trend in the U.S. toward imposing board
term limits. As an Independent Director, what do you
think about the idea of term limits for board members?”
“Monitoring the effectiveness of strategies is indicated as the objective of the Audit Committee.
If, for example, there is a situation in which key performance indicators (KPIs) set by management
cannot be achieved, would the Audit Committee present some proposals to the Directors?”
The Audit Committee receives regular reports on the
status of the lawsuits from the executive officer in
charge of legal affairs. The Committee also receives
reports from the CFO on the amount of estimated
maximum loss for each lawsuit and each case of legal
dispute at the time of each quarterly financial results
and confirms that an appropriate allowance is reflected
in the financial statements. The Committee fully
confirms the appropriateness of the accounting of the
provision for allowance concerning lawsuits, etc. and
descriptions in the notes to financial statements.
In Japan, the term of office for directors and a
mandatory retirement age system for executive
officers are generally established by companies,
often varying by the individual company. The term
of office for Outside Directors is also determined
at Nomura. The renewal of these terms or
retirement from office for board members is
proposed at a general meeting of shareholders
every year. I believe that these standards and
measures are appropriate.
We have various KPIs and goals to achieve by 2020.
The Audit Committee tracks progress at least every
quarter and monitors not only the figures indicated in
the financial results but the degree to which our goals
have been achieved, including the enhancement of the
earnings structure. In addition, we take care not to show
individual numbers out of context. Looking back at
Nomura’s scandals in the past, the people working on
site focused too heavily on numbers above all else,
which led to improper transactions in some cases. It is
important to achieve numerical goals but that should
not be the only goal. The primary objective of our
management vision for 2020 (Vision C&C) is to create a
robust operating platform capable of delivering
consistent growth for the Nomura Group. To achieve
our vision, we are working to address two overarching
issues: transforming our business model in Japan and
improving the profitability of our international operations.
When our vision is achieved, we will attain an EPS of
¥100. At the recent meeting of the Board of Directors, I
strongly reiterated this message to the execution side as
the chairman of the Audit Committee.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Interview with Outside Director: An Investor Asking Questions from the Viewpoint of Governance
I will help the Nomura Group
enhance its competitiveness with
my suggestions
Hiroshi Kimura
Outside Director
Member of the Nomination
Committee, Member of the
Compensation Committee,
Honorary Company Fellow of
Japan Tobacco Inc.
Yuki Kimura
Representative Director, Japan
Stewardship Forum
Representative Executive
Director, Institutional Investors
Collective Engagement Forum
too long, making them too close to the management. I
think a term of six years is appropriate with a system where
a small number of Outside Directors are replaced each year.
The Board of Directors began self-assessments in 2016.
The Board finished the third self-assessment a short time
ago. I believe the PDCA cycle is repeated well, where each
individual director self assesses their respective roles and
effectiveness of the Board of Directors, followed by a
Directors’ meeting which discusses areas of improvements
the Board of Directors should address.
into China and launching the Merchant Banking Division. In
taking those risks, it is extremely important to consider
capital costs as hurdle rates for such investments.
I also think Nomura HD is taking credible initiatives in ESG
(environment, social and governance), which have been
attracting interest in recent years. Nonetheless, I feel there
is still room for improvement from the viewpoints of
disclosure and explanations to investors and stakeholders.
Those of us acting as Outside Directors are currently
thinking about deepening discussions on ESG initiatives.
YK Let me ask you about Nomura HD’s management strategies
and business challenges. How do you assess Nomura HD’s
current management policies and strategies as an Outside
Director? What kind of advice are you providing to Nomura HD?
HK To put it briefly, I rate Nomura HD’s business strategies
highly. Japan’s population is aging while the birthrate is falling.
A declining population has become a reality. Under this
condition, the Retail Division initiated a major paradigm shift
in 2012 to change the nature of its businesses. Those
changes are still in progress, but I think the direction is correct.
Unlike manufacturing, Nomura HD’s businesses do not require
huge capital investments in areas outside IT, but relies instead
YK Mr. Kimura, you have deep experience in M&A abroad
as well as in running overseas businesses as the former
top executive at Japan Tobacco Inc. (JT). Please share
your assessments and advice on Nomura HD’s global
strategies based on your own experiences.
HK My experiences at JT will not apply unconditionally to
the way Nomura HD manages its overseas businesses
because there are characteristics peculiar to individual
business categories. But JT focused on markets where they
could gain the largest or the second largest share, and did
not move into markets that would not allow it to achieve that
result. I believe for financial institutions, securing revenues
63
Yuki Kimura (hereinafter “YK”) Mr. Kimura, could you
begin by explaining specifically the kinds of activities you
are actually involved in as an Outside Director of Nomura
Holdings, Inc. (hereinafter “Nomura HD”)?
Hiroshi Kimura (hereinafter “HK”) Attending the Board of
Directors meetings held once every month is my basic duty
as an Outside Director. I feel the Board of Directors meeting
of Nomura HD is managed extremely well. I was assigned
as an Outside Director at Nomura HD in June 2015. In my
first year, I attended Audit Committee meetings held once
every month as a member of the committee. Since 2016, I
have been acting as a member of the Nomination and
Compensation Committees. However, I am still able to
attend the Audit Committee meetings as an observer. The
Audit Committee interviews different members each month,
rotating between the Group CEO, the Group COO and the
heads of each division. Audit Committee meetings are very
good opportunities to get to know the senior management,
so I try to attend them whenever possible. The Nomination
and Compensation Committees meetings are held before
the Board of Directors meetings whenever necessary. At
Nomura HD, members are the same for Nomination and
Compensation Committees. I think it is rational to have the
same members because assessment and compensation of
senior management are inseparable.
YK Please share your specific assessments of the
structure and administration of the current Board of
Directors. In addition, please tell us how the Board of
Directors’ self-assessment is done each year about its
effectiveness reflected in the administration of the Board of
Directors and management of Nomura HD.
HK I think the current composition of the Board of
Directors is excellent because it assures diversity. The
Board consists of 10 members. This is the right size for
active discussions. Six Outside Directors are a majority of
the Board of Directors, including one female and one
non-Japanese citizen. Another female non-Japanese
Outside Director joined the Board at the General
Shareholders’ Meeting held this June. Non-Japanese
Board members provide valuable perspectives, such as
how Nomura HD is viewed worldwide and how regulatory
authorities are acting overseas. Their perspectives are
helping Nomura’s management decisions a great deal.
Speaking of information provision, the secretariat explains
agenda to Outside Directors before Board of Directors
meetings, in addition to reporting business conditions every
month. The CFO also explains quarterly results to Outside
Directors individually before Board of Directors meetings.
Outside Directors also receive abundant externally-
published references about Nomura HD, including reports
by sell-side analysts. I think how external parties view
Nomura HD is useful for Outside Directors to assess its
business administration appropriately.
Besides Board of Directors meetings, all Outside Directors
of Nomura HD, including foreign citizens, meet several
times each year where their consolidated opinions are given
to top management.
In certain instances, such as a violation of our professional
code of conduct or investments needed on a long-term
basis, Outside Directors need to provide advice if they may
affect revenues negatively in the short-run. They cannot fully
grasp management’s vision if their tenure is too short.
However, I don’t think it is good for their tenure to become
64
on its human resources and talent. The question we should
ask is whether the mindsets of employees agree with
business strategies. Whilst changes take place each year,
continuous initiatives are necessary for establishing such a
mindset. For that reason, Nomura HD has designated August
3rd to observe “Nomura Founding Principles and Corporate
Ethics Day” to reflect on its corporate culture and to prevent
memories of past scandals from fading away. All Nomura
HD directors and employees, including myself, watch a
video and sign an attestation on this day. It’s a recurring
process. I think repeating the same thing is essential.
In the meantime, Nomura HD cannot allocate resources to
all regions of the world. Nomura HD, based in Asia, is
strategically solidifying its foothold by pursuing synergies
from an alliance with American Century Investments in the
U.S., the largest market in the world. Nomura HD also
reviewed overseas businesses’ cost-intensive tendencies.
Ensuring responsible and sustainable profits overseas will
be the key to achieving the EPS target. Geopolitical risks
were observed in the most recent quarter, but I would like
Nomura HD to promptly link those initiatives to growth.
Nomura HD must keep defining markets where it should
compete and allocate resources to them. I think Nomura
HD is taking the necessary risks, such as making inroads
will be impossible, unless a fair share of the market is
captured. I believe it is essential for Nomura HD to determine
the markets where it can compete successfully.
Regulations are another point the tobacco and financial
industry have in common. The viewpoint of shaping the
future together with the authorities by valuing dialogue
with them, ascertaining global trends in regulations and
making the first move is important in such industries. I
think Nomura HD understands this point well and is
working with the authorities appropriately.
YK Japan’s Corporate Governance Code attaches
importance to dialogues with shareholders. Outside
Directors are expected to have dialogues with shareholders,
too. Please share your opinions about the current state of
Nomura HD’s dialogues and direction going forward.
HK The Board of Directors is receiving feedback from
investors following the announcements of financial results
and IR briefings. The feedback explains areas of investor
concerns and clearly sets out their critical opinions which
enable Nomura HD’s management to deal with them
properly. There is no reason for Outside Directors to recoil
from dialogues with investors if investors ask for them.
Indeed, these discussions have added value.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Risk Management
65
Fundamental
approach
Nomura Group has established processes to accurately identify risks arising from all
types of operations and trading, and is working to bolster risk evaluation and the risk
management framework.
Risk Management
Risk culture
Risk management policy
Retail
Asset Management
Wholesale
Corporate
Other subsidiaries
Key risk types
Market Risk
Credit Risk
Operational Risk
Model Risk
Liquidity Risk
Compliance Risk
Risks taken by Nomura Group differ by divisions or
businesses. We have established a risk management
framework based on risk profiles.
Nomura Group has adopted a multi-faceted risk evaluation
process to avoid risks that may be damaging to our
reputation. Risk management oversight is carried out by the
committees comprising members of senior management.
The Global Integrated Risk Management Committee
(GIRMC) and the Global Risk Management Committee
(GRMC), for example, deliberate and decide on risk
management issues material to the firm.
Unavoidable risks
Operational risk
Model risk
Liquidity risk
Risk of suffering losses due to internal
administrative processes, people, or systems
being either inappropriate or not functioning
properly.
Risk of loss arising from model errors,
incorrect or inappropriate model application
with regard to valuation models and risk
models.
Risk of losses arising from a potential lack of
access to funds or higher cost of funding than
normal levels due to deterioration in Nomura’s
creditworthiness or deterioration in market
conditions.
Selective risk taking
Risks that must not be taken
Market risk
Credit risk
Risk of loss in the value of financial assets and
liabilities, as a result of market move in risk
factors including interest rates, foreign
exchange, and price of securities.
Risk of suffering losses when a borrower is
unable to make payment and fail to meet a
contractual obligation.
Compliance risk
Risk that can lead to administrative
punishment, economic losses, and
reputational damage when Nomura
executives or employees violate laws and
regulations. Compliance risk also includes risk
of losses caused by violating Nomura Group’s
Code of Ethics and other internal policies and
guidelines, including harassment.
66
Fostering a sound risk culture is essential for Nomura
Group to maintain its social credibility and sustain its
business activities. At Nomura Group, all employees,
irrespective of their function or geographic location,
must understand their specific responsibilities related to
risk management, and actively work to manage risks.
Our business activities are exposed to various risks
including market risk, credit risk, operational risk and
liquidity risk. Properly managing these risks is one of
management’s top priorities.
It is important for us to maintain capital adequacy and
achieve business plans under any type of economic
environment, to protect our clients, and to comply with
laws and regulations.
Nomura Group has defined the types and maximum
levels of risk that the firm is willing to take, as
documented in the Risk Appetite Statement.
Our Risk Appetite Statement and risk appetite are
approved by the Executive Management Board, and the
risk is monitored daily against a set of risk appetite. If by
any chance risk amount exceed risk appetite, the senior
management consults with stakeholders and takes
actions to solve such excess.
Risk management
approach at
Nomura Group
Implemented frameworks to evaluate and control the possibility of risks arising from
the firm’s operations and transactions.
Quantifying risks as much as possible.
Taking a prudent approach to risks which are outside the area of experience and
knowledge, and those that are difficult to control by hedging or other mitigating actions.
Setting risk appetite and guidelines for:
Capital adequacy
and balance sheet
measures
to comply with capital regulations imposed on
financial institutions and to maintain a strong
financial base in continuing to conduct
businesses under various economic
conditions.
Liquidity risk
to maintain sufficient liquidity to survive a
severe liquidity situation and to comply with
regulatory requirements.
Market risk and
credit risk
to manage market risk and credit risk within
wholesale businesses.
Operational risk
to understand and mitigate the impact and
likelihood of operational risk events assumed
in the course of conducting business.
Compliance risk
to promote proper understanding and
compliance with the letter and spirit of all
applicable laws, rules and regulations and
avoid misconduct.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Risk Management
The three lines of defense in risk
management
Nomura Group has adopted the following
layered structure on the grounds that all
employees are accountable for proactively
managing risk.
67
Chief Risk Officer Message
Risk Culture In Nomura
Lewis O’Donald
Chief Risk Officer (CRO) (based in London)
Establish and promote the risk management framework;
monitor and challenge the first line of defense
Review from an
independent position
1
Departments
engaged in trading
and sales
2
Departments
engaged in risk
management
3
Internal Audit
First line of defense
Second line of defense
Third line of defense
As the first line of defense, departments engaged in
sales and trading manage the risks associated with
their own business activities.
For example, trading departments do business within
predetermined risk limits, and proactively identify and
address any issues they find.
Departments engaged in risk management establish
frameworks to manage each type of risk, and support
risk management measures taken by the First Line of
Defense, such as sales and trading departments.
Second line of defense independently monitor risks,
and keep trading and sales departments in check as
needed.
Internal Audit reviews and provides consulting from
an independent, objective position, with the aim of
adding value by improving the organization’s
operations and frameworks, including risk
management.
68
important for all of us. Lastly we
work hard at giving a clear ‘tone
from the top’ showing that our senior
managers live and breathe the
highest standards of conduct and
ethics every day. By continuing to
emphasize our culture and our
conduct in the markets and to our
customers we believe we will
continue to build a firm with the
highest standards in the
marketplace, to the benefit of our
clients and our stakeholders.
In Nomura we have a significant
reliance on strengthening risk
management. What do we mean by
this in practice? First to define our
goals in risk management for
Nomura: it is to make sure Nomura
is resilient to market shocks and
unexpected threats and that we
have hence have enough capital to
continuously run our business. It is
also to make sure the returns we
make on this capital – our
shareholders capital – are
appropriate and in alignment with
our strategic goals.
The terminology of Risk can be
intimidating. But at its core it is
simple. At Nomura,– the executives
and the board as the firm’s
representatives – defines a risk
capacity: the maximum amount of
risk the firm would want to take.
Then it sets a risk appetite: the
amount of risk the firm wants to use
– of its capacity – in pursuit of its
strategies. This appetite is allocated
into the divisions and sub-divisions
of the firm in accordance with its
business plans. What we mean by
risk here can be many things – but
risk management tries to use
measures – think a ruler to tell which
risk is larger than another – which
distil many risks into one number.
The actual methodology used in this
measurement has a degree of
complexity and can be technical, but
it is important for all our employees
to be aware of the risks they take on
for Nomura in the course of
business. This is one of the most
important tenets of risk management
at Nomura – that we are all risk
managers, and we have
responsibility for the actions we take
when we expose – knowingly or
unknowingly – Nomura to risk.
This idea that we are all risk
managers is an intrinsic part of our
risk culture. Culture can be a hard
idea to encompass, so what do I
mean by Nomura’s risk culture: I
mean how we see and experience
people in Nomura reacting and
interacting with each other over risk
outcomes. We want our risk culture
to be strong and control focused
and to permeate the organization
organically, and to influence our
people when they must take
decisions which affect the firm. It is
difficult to measure, and it is hard to
change, but we try to develop ours
through training, through incentives,
through mentoring and good
practice and through leadership.
Our culture is built from our
Corporate philosophy and the values
we espouse: Entrepreneurial
leadership, teamwork and integrity.
We try to continuously remind our
employees both of their legal
requirements as well as their
obligations to the firm through
training; we also hold “Nomura
Founding Principles and Corporate
Ethics Day” each year where we
re-inforce our message and why it is
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Risk Management
Stress testing
Nomura Group conducts stress testing to address risks
that may spread globally, and to identify risks that are
difficult to recognize with statistical methods alone, as
well as to prepare for unprecedented risk events.
Stress testing uses stress scenarios to assess the impact
on our business and financial soundness should those
adverse events occur. These scenarios may include
severe deterioration in the economic environment,
geopolitical conflicts and natural disasters.
Examples of stress scenarios
Assessment of capital
adequacy under the
scenario that a serious
economic situation that
occurred in the past
happens again
(Example: Financial crisis)
Assessment of the
impact on Nomura’s
earnings of extreme
economic conditions that
could occur in the future
(Example: Economic
collapse in a particular
country or region)
Assessment of the
impact on Nomura’s
portfolio of political
events in Japan or
overseas
(Example: UK referendum
on leaving EU)
Assessment of the
impact on Nomura’s
earnings of a large-scale
natural disaster
(Example: earthquake
directly under the Tokyo
metropolitan area)
69
Risk is a possibility of suffering
unexpected losses caused by any
number of reasons. Then what is
risk management? In short, I think
the risk management is an approach
of how to reduce this uncertainty.
In many financial institutions
including Nomura, risk management
starts with understanding the risks
by quantifying them. Needless to
say, no one can predict the future,
so the banks collect data from past
events, and use some statistical
techniques to estimate what to
expect in the future. As history
repeats itself, looking back on the
past may have positive implication
for future prediction. That said
nothing can be estimated with 100%
accuracy.
Chief Risk Officer Message
Yuji Nakata
Executive Managing Director
Head of Group Entity Structure and Co-CRO
So, what can be done to reduce the
unexpected? Let inspirations and
imaginations run at every possible
direction and get prepared. That is
the basics of risk management. At
the same time, prepare for the worst
on the premise that no matter how
hard we try to predict, unexpected
things will happen. In financial
institutions we prepare for the worst,
or turning unexpected into expected,
by maintaining adequate capital
levels.
Cyber security measures
Nomura Group has for some time been undertaking security measures to protect systems against
cyber-attacks. However, in light of the increasingly serious cyber security threats throughout the
world, we recognize that our current countermeasures may not be sufficient in the future.
In order to ensure that clients’ information and assets are securely protected from these
increasingly challenging cyber security threats, and to enable clients to conduct transactions with
peace of mind, Nomura Group is working to strengthen its cyber security platform, using the
Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc of the
Financial Services Agency, the Cybersecurity Management Guidelines of the Ministry of Economy,
Trade and Industry based on ISO27001 and ISO27002 as a reference.
Cyber security system
Nomura Group, as a whole, has established a global organizational structure to deal with incidents
stemming from cyber-attacks and to minimize potential damage. The Nomura Group Computer
Security Incident Response Team (CSIRT), formed within Nomura Holdings, has spearheaded the
formation of a CSIRT in Nomura Securities and other Group companies, and governs the CSIRT in
each Group company. Each CSIRT works to protect its company’s operational and information
assets, as well as systems, promoting cyber security measures from four factors: organizational
management, system security measures, human-level response, and coordination with outside
organizations.
Executive Management Board
Board of Directors
Organizational structure
Crisis Management Committee
The Manager of the CIO Office, Nomura
Holdings is in charge.
The organization comprises of the
CSIRT representative of each Group
company and is set up within the CIO
Office (Crisis Management Division) of
Nomura Holdings.
Outside relevant parties
Regulatory agencies
Police
Media, etc.
Communication
and response to
outside parties
Cooperation and
information sharing
JPCERT/CC
Securities CEPTOAR
Financials ISAC
Security experts
Provision of
information
vulnerability,
attacks, etc.
Office of Crisis Management
Committee
Person in charge of
information security
Reporting, checking of management instruction
Nomura Group CSIRT
70
NHI Manager of the CIO Office
Secretariat
NHI Group Strategy and Executive Office
NHI Group Compliance Dept.
NHI Group Corporate Communications Dept.
NHI General Services Dept.
NHI CIO Office (Crisis Management Division)
CSIRT Representative of
Nomura Securities
CSIRT Representatives of
Nomura Group companies
CSIRT of Nomura Securities
CSIRT of Nomura Group companies
Organization
management
We continuously strive to enhance our cyber security platform at “normal times” by taking
measures such as participating in drills to protect against cyber-attacks, by having the
effectiveness of our measures evaluated by outside cyber security experts, and by
knowing the status of measures taken by outside vendors. In the case of an incident such
as dangerous, vulnerability information or detection of a cyber-attack, the CSIRT leads
the efforts to analyze the cause, minimize damage, and quickly restore systems.
System security
measures
We adopt a multi-layered defense system, which includes multiple detection and
defense mechanisms against unauthorized access and malicious programs such as
computer viruses. We review these countermeasures as appropriate to deal with
new threats.
Human-level
response
Cooperation
with outside
organizations
Based on the Nomura Group Information Security Policy, relevant seminars and training
programs are regularly provided to all executives and employees in order to raise their
awareness and knowledge.
Nomura Group has established information collection and sharing systems related to
cyber-attackers and attack methods, through information sharing organizations such as
Financials ISAC Japan and Nippon CSIRT Association, as well as FS-ISAC (U.S.) and
other overseas organizations.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Compliance
Legal compliance measures
Offering high-quality financial services
Maintenance of compliance framework and
enhancement of management systems
Compliance Hotline
Carrying out compliance training
In all Group companies and departments, Nomura Group
complies with applicable laws and regulations and
endeavors to prevent the occurrence of activities that
may be construed as illegal by establishing effective
control measures. In the event that such issues arise,
they are reported in full to management-level officers
without delay, and organizations and systems are
structured to respond appropriately.
Nomura employees who have become aware of potential
legal or regulatory violations are able to report
their concerns to persons designated by Nomura
Holdings, including Outside Attorneys, through the
Compliance Hotline (informants have the option of
remaining anonymous). In 2017/18, there were 31 calls
received via the Compliance Hotline, and in all cases the
status of related matters was confirmed and appropriate
measures were taken.
Nomura Securities conducts comprehensive compliance
training for all Executive Officers and employees on
topics such as the prevention of money laundering and
insider trading, firewall regulations, and guidelines for
managing customer information.
Nomura Securities seeks to enhance the quality of
financial products and services offered to customers
through the following initiatives under the Guidelines for
Supervision of Financial Instruments Business
Operators, etc.
Nomura Securities’ Primary Initiatives
Appointing officers to oversee internal controls,
compliance, etc., and developing systems to
ensure compliance and appropriate operations
Thoroughly screening account openings and
conducting proper examinations when underwriting
securities
Nomura Securities’ Compliance Framework
https://www.nomuraholdings.com/company/compliance/index.html
72
Ensuring fair financial business practices
Customer protection and information security
Prohibition of transactions with anti-social forces
Proper segregation of customer assets
Prevention of money laundering
Prevention of bribery
Management for conflicts of interest and prevention
of insider trading
Nomura Group works to eliminate transactions with
anti-social forces and prevent money laundering. Moreover
in order to supervise and manage the group-wide control
framework for anti-money laundering and counter-terrorist
financing (AML/CTF), Nomura Group has established the
"Anti-Money Laundering Department" in April 2018.
Nomura will continue to enhance the measures for AML/
CTF and develop the effective control framework.
Nomura Group has also established guidelines related to
giving gifts to and entertaining public officials and private-
sector groups, and disseminates the guidelines throughout
the Company and works to ensure fair business practices
to prevent bribery. We consolidate information in the Group
Compliance Department to manage conflicts of interest
and insider information with a global perspective.
For further information, please refer to our website.
Effective protection of clients’ personal information
and other information assets of the Group
In accord with applicable laws and regulations, including
the Financial Instruments and Exchange Act and the
Personal Information Protection Act, Nomura Group
works to properly protect customers’ assets and
information. Nomura Securities properly segregates the
assets of its customers from the assets of Nomura
Securities itself. The Nomura Group Information Security
Policy provides the basic principles for appropriately
protecting information assets.
Customer-related personal information is handled in line
with rigorous standards set out in the Nomura Group
Privacy Policy and other information security- related
rules, and is handled in full compliance with the Personal
Information Protection Act and other related laws and
regulations.
For further information, please refer to our website.
Fair Financial Business Practices
https://www.nomuraholdings.com/company/compliance/index.html
Nomura Group Privacy Policy
https://www.nomuraholdings.com/policy/privacy.html
71
Fundamental
approach
Compliance is a top management priority for Nomura Group, and the Code of Ethics of
Nomura Group defines our fundamental policy on compliance. The management and
employees of the Group pledge to abide by the rules stated in this code once each year. Also,
we have established “Nomura Founding Principles and Corporate Ethics Day” as a day for
management and employees annually to reaffirm our corporate culture and corporate ethics,
underpinned by Our Founder’s Principles.
Compliance
Compliance framework
We have appointed a Group Compliance Head to
oversee compliance for the Group as a whole along with
a Group Compliance Department that provides support.
In addition, Compliance Officers have been assigned to
each Group company to strengthen our internal controls
in response to global business development, and to
develop and maintain the respective compliance
structures of each Group company, including overseas
offices.
In addition to Group-wide initiatives, Nomura Securities
has established a Compliance Program as a detailed
action plan, and put into place a compliance framework
based on this program.
Executive Management Board
Board of Directors
Nomura Holdings
Audit Committee
Group Compliance
Department
Nomura Group companies
Group Compliance Head
Direction
Report
Compliance Officers
Direction
Report
Departments
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Human Resources Strategy
Fundamental
approach
Individuals of more than 90 nationalities are currently employed in Nomura Group. This diverse
group of people represents our greatest asset. Nomura Group provides equal opportunities,
builds a healthy work environment and, under the Code of Ethics of Nomura Group, forbids
discrimination based on nationality, ethnic origin, race, gender, age, religion, beliefs, social
standing, gender preference, gender identity, disability or any other attribution, so that each
and every employee can be active and successful in utilizing her or his capabilities and
personal strengths.
73
Human Resources Strategy
Human resources framework
Global framework
Nomura Group employs a pool of professional personnel
around the world who are capable of providing financial
services that meet the diverse needs of clients, and
whose career paths within the Group and values are
unique. Particularly upon taking on employees from
Lehman Brothers in 2008, we adopted a globally
integrated approach to human resource management.
We strive to manage our personnel in a flexible and
suitable manner so that each and every one of our
employees can thrive as they contribute their skills to
the workplace.
Ratio of employees by region
6
6
11
77
(%)
100
80
60
40
20
0
24
Asia-Pacific
9
11
Americas
Europe
56
Japan
2008
2018
(End of March)
Recruitment and hiring
Recognizing that people are our greatest asset, since
our founding we have placed particular emphasis on
recruitment. In our constant efforts to secure the most
talented people, we continue to follow a policy of
recruiting people regardless of nationality, gender, and
other attributes. In FY2015/16 we introduced a “career
support system” for new graduate hires in Japan, and
we have broadened contact points with students by
expanding our internship program and other measures.
Overseas, we have also begun hiring new graduates by
introducing an internship program.
In recent years, we have also been actively hiring mid-
career professionals capable of contributing immediately,
and about 1,000 people in Japan and 1,500 people
overseas each year have been joining Nomura through
this route. In addition, we have been rehiring employees
who previously left Nomura, with the expectation they will
hit the ground running. A system of job classification
based on the core work responsibilities of Nomura
consists of General Career Type A employees, Type B
and Type C. General Career Type A employees and Type
B differ only in that the latter are not subject to relocation.
The aim with both is for employees to develop careers as
generalists based on a broad range of experience.
Personnel development
In developing and growing our business globally, we believe
that improving our personnel system is important in order
to ensure that personnel with diverse career backgrounds
and values can demonstrate their talents. Accordingly, we
provide diverse education and training programs to help
employees at all levels develop their careers.
In Nomura Securities, each division appoints instructors to
serve for one year to guide and train new hires and help
them develop into talented and independent-minded
employees. In the Retail Division, a (management-level)
employee is appointed as a mentor to work with the
instructor in nurturing sales staff. In order to make
personnel development more visible on a global basis,
Nomura has established and utilizes a framework that
compiles the necessary actions and skills to improve
performance and achieve targets to clearly indicate the
skills to be developed by employees and their evaluators
through dialogues. With regard to Type C employees, who
are highly skilled in a specific area, we have put in place a
system that allows employees hired in Japan and those
hired overseas to take courses with identical content.
In addition to training programs for new hires, our core
programs in Japan include group training programs
based on years of service and job position, elective group
training programs tailored to staff in the Wholesale and
Corporate divisions, and on-the-job training. To support
self-driven skills development, we have also established a
self-study support system that includes a wide range of
General Career Type C employees are specialists who
pursue advanced expertise as required in their particular
business area. We have also adopted a personnel
management approach that ensures that people are
placed in positions they are best suited for and that each
employee can display their capabilities to the fullest. An
example of this is our system under which employees
can transfer from General Career Type A to Type B
employees, Type A employees can switch to Type C
employees, and Type C employees and employees
located in overseas offices can apply for other positions
using an internal job posting program.
Number of new hires
Financial advisors
(new graduates)
1%
General Career
Type C employees
(new graduates)
6%
General Career
Type B employees
(new graduates)
28%
General Career Type
A employees
(new graduates)
36%
Mid-career hires
29%
(Japan: Nomura Holdings, Nomura Securities FY2017/18)
external training and correspondence courses helpful in
enhancing business and management skills, including
language courses. Furthermore, in order to develop
personnel capable of playing an active role globally, we
have established study-abroad programs and overseas
training programs that employees themselves determine
where they go and what topics they study.
Amount invested in employees
Education and
training expenses
2,987
2,987million yen
(FY2017/18)
2,033 million yen
(FY2011/12)
Japan 2,093
Europe 228
Americas 435
Asia-Pacific 230
In-house training
Cumulative total of participants:
Cumulative total of hours:
227,824 employees
530,869 hours
(FY2017/18)
(FY2017/18)
*Subtotals may not add up to totals due to rounding.
74
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Human Resources Strategy
Proper evaluation and compensation
To properly evaluate performance and further the development of personnel, the Group
adopts an integrated personnel evaluation process and all employees in principle participate
in this process. Employees set their goals at the beginning of each year, and these goals
are aligned with the Group’s strategy as well as competency and behavioral requirements.
Employees then meet with their supervisors in the middle and at the end of the year to have
frank discussions regarding goal attainment. This approach enables the Group to evaluate
its personnel fairly and identify development opportunities suited to their capabilities and
competencies. For personnel chosen from among those in managerial-level positions,
depending on the business unit the Group also provides 360-degree evaluation based on
feedback from their supervisors, fellow employees, and persons under their supervision.
Every employee is provided, in principle once a year, with an opportunity to be interviewed by
the Human Resources Department and directly communicate their thoughts about their career.
The Group has established its Compensation Policy for Group management and employees.
This policy aims to promote the sustainable growth of the Group and continue increasing its
global competitiveness and shareholder value over the long term. It also has the objective of
contributing to the value-added the Group can offer its customers and realizing continued
improvement in the Group’s evaluation among its clients through securing, retaining,
motivating, and nurturing outstanding employees.
75
Nomura Group’s Basic Compensation Policy
https://www.nomuraholdings.com/csr/employee/capability.html
Work Style Innovation
Promoting Work Style Reform and Health &
Productivity Management
In July 2016, Nomura Group adopted the NOMURA
Health & Productivity Declaration Statement as part of
the Group’s efforts led by the Group Chief Health Officer
(CHO) to maintain and improve the health of employees.
In addition, Nomura has launched the “Nomura Work
Style Innovation” initiative, which comprises “Work Style
Reform” and “Health & Productivity Management,” and
has been developing an environment since 2017 that
enables diverse employees to demonstrate their talents
and play active roles. Under this policy, Nomura has
introduced a work-from-home system and a system that
enables leave to be taken flexibly on an hourly basis,
established new leaves for medical check-ups and follow-
up examinations, and enhanced the self-improvement
support system. Nomura has further promoted these
initiatives by establishing a new internal website for
posting information, distributing letters to all employees
from the Vice Chairman of Nomura Holdings, Inc. who
serves as CHO, and appointing people in charge of
promoting initiatives in each division.
Diversity and Inclusion
Supporting women’s careers
LGBT inclusion
Nomura Group believes that by having employees with
diverse backgrounds and values respect one another
and work together, the organization is better able to
provide high value-added services and satisfy a wide
variety of customer needs. We have established the
Nomura Group Diversity and Inclusion Committee,
chaired by the Vice Chairman of Nomura Holdings, Inc..
The committee is made up of division representatives
who regularly discuss the promotion of diversity and
inclusion. Nomura adopted the “Declaration on Diversity
& Inclusion” in 2016 based on the strong desire to form a
working environment that utilizes diverse human
resources throughout the entire Group, as well as the
“NOMURA's Declaration to Support Employees Balance
Work and Family Care” in 2017 to create a workplace
where employees who have to take care of a family
member are able to continue working. Based on this
policy, Nomura provides information to raise employee
awareness and offers services to support balance the
work and family care.
Nomura has three autonomously and globally run
employee networks* to provide a range of information
and hold events related to diversity in the workplace.
These networks also provide opportunities for interaction
both internally and externally.
* “Women in Nomura (WIN),” which focuses on women’s career advancement
“Life & Family Network (L&F),” which is concerned with work-life management
“Multi-Culture Value (MCV),” which promotes understanding of diverse value systems
and multicultural values including LGBTA and the disabled
Nomura Securities has set a quantitative target of 550
female managers by 2020. In March 2016, an action plan
was announced to help women thrive in the company. The
action plan outlines initiatives to achieve quantitative targets,
including support for female employees’ career-building and
support for balancing their careers with life events, among
other measures to establish an employment environment in
which female employees can thrive.
Nomura promotes initiatives to support women in
improving their careers. These initiatives include a
mentoring program for managers, a sponsorship
program in which executive officers support management
candidates, training programs for career design for
management candidates, and social events with senior
employees who become role models for young
employees. Moreover, we provide training on diversity
management, including promoting women’s participation
in the workplace, to managers (including men), as we are
striving to foster a climate where female employees can
play a more active role.
In EMEA, Nomura is working on a range of initiatives to improve
the gender balance. We issued a gender pay gap report in
the U.K., and became a signatory of the “Women in Finance
Charter” spearheaded by the U.K. government, whereby we
set a target to increase our senior women by 50% by 2021.
In June 2016, Nomura Trust and Banking received the
highest certification (three stars) (ERUBOSHI certification)
of the Minister of Health, Labour and Welfare under the
Act on Promotion of Women’s Participation and
Advancement in the Workplace.
At Nomura Securities, we have implemented measures
to support lesbian, gay, bisexual and transgender
(LGBT) and other sexual-minority employees through
training for all employees, activities to increase the
number of allies, and by introducing a partnership
system. In recognition of these efforts, we were given
the highest Gold grade in the Pride Index, Japan’s first
evaluation of the LGBT-friendliness of work
environments run by Work with Pride, a private group,
for two consecutive years in 2016 and 2017.
76
Our People
https://www.nomuraholdings.com/csr/employee/index.html
External evaluations
Jun.
2007 ~ Kurumin (Nomura Securities)
Dec.
2015 ~
Certification of Osaka City “Female employees
leading company” (Nomura Securities)
Jun.
2016
ERUBOSHI (Nomura Trust and Banking)
Oct.
2016 ~ Tomonin (Nomura Securities)
Oct.
2016 ~ Pride Index, Gold grade (Nomura Securities)
May.
2017
AllAboutCareers School Leaver Awards
(Nomura International plc)
Dec.
2017
TechWomen 50 (Nomura International plc)
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Contributing to Sustainable Communities
77
Fundamental
approach
We are working to help find solutions to social and environmental issues by communicating
with a wide range of stakeholders, from customers to shareholders, local communities, and
employees on a continual basis.
Based on Our Founder’s Principles that have been inherited since the foundation of the
Company, the Nomura Group Corporate Philosophy states that “We help to enrich society
through our expertise in capital markets” as our social mission.
Contributing to
Sustainable Communities
Communication with stakeholders
Nomura Group participates in initiatives in Japan and overseas
that aim to contribute to society and the environment to fulfill its
corporate social responsibility as a corporate citizen.
Through dialogue and collaboration with stakeholders, we
carefully examine the activities and information disclosure we
undertake that are related to the economy, society, and
environmental issues. We also review these activities and
information disclosure, and report to the ESG Committee
when needed.
Communication with Stakeholders
https://www.nomuraholdings.com/csr/stakeholder/communication/
Participation in Initiatives for Sustainability
https://www.nomuraholdings.com/csr/stakeholder/initiatives.html
Themes
Initiatives
Outline
Human rights, labor,
environment, anti-corruption
United Nations (UN) Global Compact
Participation in Global Compact Network Japan
ESG
ESG
ESG
UN Principles for Responsible Investment
Participation in the Japan network
Principles for Financial Action for the 21st Century
Participation in working group on asset management,
securities, and investment banking businesses
Global partnership with communities
In the regions around the world where Nomura Group
conducts business, we share the basic CSR theme of
“For Future Generations” and carry out activities in line
with regional needs while forming partnerships with
NGOs and other entities. These activities are focused
on nurturing future generations.
External Assessment
http://www.nomuraholdings.com/csr/society/contribution/index.html
TOPIC
1
“Proudly supporting Japan every step of the way.”
Contributing to Japan’s economic
growth through supporting the Tokyo
2020 Olympic and Paralympic Games
As an official Tokyo 2020 Olympic and Paralympic Games Gold Partner in the Securities category, Nomura
Holdings is committed to the success of the Tokyo 2020 Games and to the promotion of initiatives extending
beyond the Games.
Nomura Group’s financial and economics education programs have been approved as official programs of the
Tokyo 2020 Olympic and Paralympic Games. We have prepared educational materials centered on the themes
of finance and economics, as well as the Tokyo 2020 Games, and we send Nomura Group employees to serve
as visiting lecturers at schools. We hope to help children better understand the world and economy so as to
support the Tokyo 2020 Games from a broader perspective.
78
TOPIC
2
Ball for All
Bringing Japan’s volleyball
community together
Nomura Group is supporting the Japan Para-Volleyball Association as a special top partner to encourage
general understanding of para-sports and their athletes. The association is working to popularize sitting
volleyball. Nomura’s directors and employees are participating in sitting volleyball events and assisting with
official games. In April 2018, when we began supporting the All Japan Women’s Volleyball Team, the “Ball for All”
project was launched to add fulfillment to society by promoting diversity through volleyball, a sport in which a ball
Environment
CDP
Promotion, as a signatory, of the climate change and water programs
We are committed to supporting not only official games and athletes but also everyone involved as they assume
Environment
Task Force on Climate-related Financial Disclosures (TCFD)
Expressed our support
their personal challenges.
Climate Bonds Initiative
Participation as a partner in activities to promote green bonds
is passed among people with different personal backgrounds.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Environmental Initiatives
Fundamental
approach
Nomura Group, recognizing its responsibilities as a corporate group that operates globally, is
committed to helping address climate change issues through its business activities. At the same
time, we are working to reduce the environmental impact of our own business activities themselves.
The Code of Ethics of Nomura Group states, “Nomura Group is committed to acting in an
environmentally responsible manner and should therefore approach environmental issues
positively”.
In addition, based on international movements like the sustainable development goals (SDGs) and
the Paris Agreement on Climate Change, and having recognizing the impact of climate change issues
on our businesses, we are working on a global basis to find solutions to this challenge. Furthermore,
we have pledged our support for the Task Force on Climate-related Financial Disclosures (TCFD).
79
Environmental Initiatives
Nomura Group environmental targets (Japan)
In Japan, the Group is working to conserve resources and energy as it seeks to attain its target to reduce CO2
emissions per square meter in FY2030/31 by 20% or more from FY2009/10.
Nomura Group environmental objectives and progress (Japan)
FY2017/18 targets
Assessments
FY2018/19 targets
Reduce domestic Nomura Group CO2
emissions per square meter of floor space
by 20% or more from FY2009/10*1
Reduction of
greenhouse gas
emissions
Reduce the CO2 emissions per mileage
driven of leased vehicles of Nomura
Securities from the previous year
Reduce the waste emissions volume at
principal offices from FY2013/14
Reduction: 23.0%
Reduction: 1.7%
Reduction: 6.6%
Reduce domestic Nomura Group CO2
emissions per square meter of floor
space by 20% or more from FY2009/10
Reduce the CO2 emissions per mileage
driven of leased vehicles of Nomura
Securities from the previous year
Reduce the waste emissions volume at
principal offices from FY2013/14
Effective use of
resources
Have green products account for 85% of
supplies request system items
Purchase ratio: 88.05%
Have green products account for 85%
of supplies request system items
Reduction of paper
usage
Contribution to
environment
through Nomura’s
main businesses
Reduce use of copy paper (as measured
by the annual volume purchased) from the
previous year
Encourage electronic document delivery
service*2
Reduction: 0.5%
Accounts accepting electronic document
delivery: 2.76 million
Reduce use of copy paper (as
measured by the annual volume
purchased) from the previous year
Encourage electronic document
delivery service
Increase the number of financial products
and services that help resolve social issues
Underwriting and sales of green bonds and social bonds
Establishment of a dedicated ESG bond team
Launch of a research group to study the sustainable
development of the ESG bond market
Increase the number of financial
products and services that help resolve
social issues
Note: For further information on environmental objectives, please visit: https://www.nomuraholdings.com/csr/environment/management
*1: Emission factors for electricity consumption have been changed since FY2017 from emission factors as of FY2009 to annual emission factors by respective power companies.
*2: In addition to the number of accounts registering e-mail statements service, the number of accounts registering online statements service has been included in the data since FY2017.
CO2 emissions
CO2 emissions
per mileage driven
Waste emissions
volume
Green office supplies
purchase ratio
Volume of copy
paper usage
Electronic
document exchange
Number of financial
products and services
that help resolve social
issues
80
FY2018/19 targets
CO2
-20%
Year-on-year
reduction
Reduction
Compared
with FY2013/14
85%
Year-on-year
reduction
Promotion
Expansion
Environmental management
Efforts to address climate change
In 2009, Nomura Group created both its Environmental
Statement and Environmental Policy based on the Code
of Ethics of Nomura Group. Centered on the
Environmental Activities Working Group, the Group is
proactively working to reduce the environmental impact
of its business activities.
In Japan, we have established an environmental
management system (EMS) and are implementing
comprehensive environmental preservation activities to
deal with environmental risks and issues.
Our offices around the world are also implementing
environmental initiatives. For example, our London
headquarters building obtained ISO 14001 certification
in 2007 following an audit performed by a local
accreditation body and has maintained its certification
to the present. In addition, its energy management
system received ISO 50001 certification in 2015.
Nomura Group environmental management framework
Executive Management Board
Board of Directors
Approve
Report
ESG Committee
Approve
Report
The Head of Environmental Affairs
Approve
Report
Asia
Europe
Environmental Activities
Working Group
Cooperation
Americas
Nomura Group companies
Nomura Securities head
office/branch offices
Nomura Group is making efforts to improve disclosure of environmental information globally. In addition, we are
working to lighten the impact of our activities on the environment through the purchase of green power.
Greenhouse gas emissions (scope 1, 2)
Per-employee greenhouse gas emissions (scope 1, 2)
Green power purchasing volume
(t-CO2)
100,000
75,000
50,000
25,000
0
(t-CO2)
8
Europe
Asia-Pacific
Japan
Americas
6
4
2
0
Asia-Pacific
Americas
Europe
Japan
2014 2015 2016 2017 2018
2014
(Fiscal years ended March 31)
* For detailed environmental information please refer to Our Environment on page 92.
2015
2016
2017
(Fiscal years ended March 31)
2018
Japan and main Europe offices
(MWh)
40,000
30,000
20,000
10,000
0
2014
2015
2016
2017
2018
(Fiscal years ended March 31)
Our Environment
https://www.nomuraholdings.com/csr/environment/index.html
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Key Financial Data
Key Financial Data
P/L
Net revenue
Income before income taxes
Net income*
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Funding and liquidity
March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018
(billions of yen)
(billions of yen)
1,813.6
1,557.1
1,604.2
1,395.7
1,403.2
1,497.0
Liquidity portfolio*
237.7
107.2
361.6
213.6
346.8
224.8
165.2
131.6
322.8
239.6
328.2
219.3
Short-term unsecured debt
Long-term unsecured debt
5,883.5
2,293.3
6,457.3
6,127.2
2,969.3
6,218.6
6,064.0
2,557.0
6,509.4
5,947.1
3,303.8
6,593.6
4,970.3
1,883.0
5,918.9
4,628.4
2,107.0
5,218.9
* Net income attributable to Nomura Holdings shareholders
* Definition differs from financial disclosures reflecting Liquidity Management’s view. Cash and cash deposits portion of liquidity portfolio excludes funds on deposit at exchanges and
(billions of yen)
segregated client funds.
Segment information
Net revenue
Retail
Asset Management
Wholesale
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
397.9
68.9
644.9
511.9
80.5
765.1
476.5
92.4
789.9
435.6
95.4
720.3
374.4
99.4
739.3
412.9
127.3
715.3
Subtotal
1,111.7
1,357.5
1,358.7
1,251.3
1,213.1
1,255.6
Other
664.2
188.8
220.8
165.1
183.5
239.5
Unrealized gain (loss) on
investments in equity securities
held for operating purposes
37.7
10.7
24.7
(20.7)
6.6
1.9
Dividends per share (DPS)
Net revenue
1,813.6
1,557.1
1,604.2
1,395.7
1,403.2
1,497.0
Dividend payout ratio
81
Income (loss)
before income
taxes
Retail
Asset Management
Wholesale
Subtotal
Other
Unrealized gain (loss) on
investments in equity securities
held for operating purposes
100.6
21.2
71.7
193.5
6.6
192.0
27.1
111.8
330.9
20.0
161.8
32.1
82.2
276.1
46.0
127.6
36.7
15.4
179.7
6.1
74.8
42.3
161.4
278.6
37.6
103.1
66.2
100.6
269.9
56.4
37.7
10.7
24.7
(20.7)
6.6
1.9
Income before income taxes
237.7
361.6
346.8
165.2
322.8
328.2
Geographic information*
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Consolidated leverage ratio*3
(billions of yen)
Consolidated capital adequacy ratio
Income (loss)
before income
taxes by region
Japan
Americas
Europe
Asia and Oceania
Subtotal
317.2
25.7
(93.1)
(12.1)
(79.4)
386.3
29.5
(48.9)
(5.2)
(24.7)
Consolidated
237.7
361.6
363.2
(27.6)
(23.5)
34.6
(16.4)
346.8
244.8
(32.0)
(67.4)
19.8
(79.6)
165.2
234.7
50.0
14.4
23.7
88.1
328.8
(8.8)
(14.7)
22.8
(0.7)
322.8
328.2
* Region information is based on US GAAP. Revenues and expenses are allocated based on the country of domicile of the legal entity providing the service. This information is not used
for business management purposes.
ROE
ROE
B/S
Total assets
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
4.9%
8.9%
8.6%
4.9%
8.7%
7.9%
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
37,942.4
43,520.3
41,783.2
41,090.2
42,852.1
40,343.9
(billions of yen)
Total Nomura Holdings shareholders’ equity
2,294.4
2,513.7
2,707.8
2,700.2
2,789.9
2,749.3
Gross leverage (times)
Net leverage* (times)
16.5
10.4
17.3
10.4
15.4
9.3
15.2
9.6
15.4
8.6
14.7
8.8
* Total assets minus securities purchased under agreements to resell and securities borrowed, divided by Nomura Holdings shareholders’ equity.
Per share data
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
(yen)
Basic net income attributable to Nomura
Holdings shareholders per share (EPS)
Diluted net income attributable to Nomura
Holdings shareholders per share (EPS)
Nomura Holdings shareholders’ equity per
share (BPS)
29.04
57.57
61.66
36.53
67.29
63.13
28.37
55.81
60.03
35.52
65.65
61.88
618.27
676.15
752.40
748.32
790.70
810.31
8.0
27.5%
17.0
29.5%
19.0
30.8%
13.0
35.6%
20.0
29.7%
20.0
31.7%
Consolidated capital adequacy, etc.*1
March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018
Tier1 capital
Tier2 capital
Total capital
RWA
Tier1 capital ratio
CET1 capital ratio*2
HQLA*4
LCR*4
2,092.9
2,314.2
2,459.2
2,577.5
2,689.8
2,666.4
359.2
401.5
361.2
323.1
109.6
66.1
82
(billions of yen)
2,452.1
2,715.7
2,820.4
2,900.6
2,799.4
2,732.5
17,546.7
17,425.9
18,929.2
15,970.5
13,977.9
15,122.3
11.9%
11.9%
13.9%
—
—
—
13.2%
13.2%
15.5%
—
—
—
12.9%
12.9%
14.8%
3.82%
—
—
16.1%
15.4%
18.1%
4.28%
19.2%
18.2%
20.0%
4.63%
17.6%
16.5%
18.1%
4.74%
(trillions of yen)
6.2
4.5
4.0
175.8%
180.0%
153.6%
*1 Based on Basel III
*2 CET1 capital ratio is defined as Tier1 capital minus minority interests divided by risk-weighted assets.
*3 Tier1 capital divided by exposure (sum of on-balance sheet exposures and off-balance sheet items).
*4 Monthly average of 4Q.
Number of shares outstanding, share price, etc. March 31, 2013 March 31, 2014 March 31, 2015 March 31, 2016 March 31, 2017 March 31, 2018
Number of shares outstanding (thousands)
3,822,563
3,822,563
3,822,563
3,822,563
3,822,563
3,643,563
Share price (fiscal year-end) (yen)
Market capitalization (trillions of yen)*
PBR (times)*
PER (times)*
* Figures based on the fiscal year-end share price.
577
2.2
0.93
662
2.5
0.98
19.87
11.50
706.2
2.7
0.94
11.45
502.9
1.9
0.67
13.77
691.9
2.6
0.88
10.28
615.3
2.2
0.76
9.75
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Financial Review
Financial review and analysis of the fiscal year ended March 31, 2018
Business environment
During the fiscal year ended March 31, 2018, the global
economy continued to recover steadily, regardless of
developed or emerging countries. The economic recovery
continued over the long term and inflation rates were also
kept low in general, due to the deep economic trough
caused by the financial crisis in 2008. In the meantime,
major central banks have gradually begun tightening their
policies, while maintaining the accommodative financial
environment as a whole.
In the U.S., under the steady expansion of domestic and
foreign economic situations, the FRB (Federal Reserve
Board) continued raising interest rates on a modest upward
trend. Although the stock market also continued to rise
until January 2018, followed by the steady progress of the
domestic and foreign economies and the reduction of
corporate taxes, it dropped sharply after the long-term
interest rate increased in February 2018, and thereafter the
high volatility environment has continued from anxiety over
trade policy. The Dow Jones Industrial Average rose by
16.6% from $20,663 at the end of March 2017, to $24,103 at
the end of March 2018. The yield on 10-year U.S. Treasury
securities increased by 0.35 % from 2.39% at the end of
March 2017 to 2.74% at the end of March 2018.
In Europe, the real GDP growth rate was 2.4%, which was
the highest since 2007, as export growth was accelerated
due to the firm growth of Chinese and the U.S. economies
and also to the robust capital investments. In October 2017,
tightening of monetary easing was announced, reducing
monthly asset purchases from January 2018, under the
quantitative monetary easing policy. However, the underlying
inflationary pressure has not increased due to sluggish wage
growth in Europe, and the ECB (European Central Bank)
shows conservative stance on immediate interest-rate hike.
In Asia, the growth of the Chinese economy accelerated
thanks to a recovery in real estate market conditions and
the expansion in infrastructure investment through a
public-private partnership system. In Indonesia, the
business environment has improved continuously as a
result of deregulation. Even in the Philippines, solid
economic growth is expected to continue, supported by
robust domestic demand.
The Japanese economy also showed solid expansion.
Exports remained robust due to the expansion of the global
economy, and capital investment increased in Japan as a
result of the growing demand in domestic labor-saving and
construction. In the first half of the fiscal year ended March
31, 2018, the upper price of Japanese stocks was
uncertain due to geopolitical risks, but as corporate
earnings came close to record levels and a decrease in
domestic political risks, Japanese stocks rose strongly from
October 2017. The momentum of the rise in stock price
continued even after the New Year, and on January 23,
2018, Nikkei Stock Average closed above ¥24,000 for the
first time in about 26 years. Since February, investor’s risk
avoidance sentiment has strengthened due to anxiety over
accelerating interest-rate hikes in the U.S. and rising
concerns of trade friction between the U.S and China, as
the world's major stock markets has entered an adjustment
phase, which narrowed the level of rise in Japanese stocks.
On the other hand, the yield of Japanese government
bonds has been kept in a narrow range by the Bank of
Japan’s yield curve control policy, and in the fiscal year
ended March 2018, the yield of newly issued 10-year
government bonds stayed in sidelines within the range of
minus 0.009% and 0.104% (closing price).
Real GDP in the U.S., Europe, Emerging,
developing Asia, Japan in the past 5 years *1
Trends in JGB 10 Year / Yen Dollar Exchange / Nikkei Stock
Average in the past 5 years *2
83
10-year government bond yield (Japan)
Nikkei Stock Average
(%)
8
6
4
2
0
-2
6.9
6.8
6.8
Emerging, developing Asia
6.5
6.5
2
1.8
U.S.
2.9
2.1
1.4
Japan
2.5
1.3
0.4
2.4
1.7
1.8
1
1.6
0.551%
2.2
¥12,398
-0.3
Europe
¥94
2013
2014
2015
2016
2017
Mar. 2013
Mar. 2014
Mar. 2015
Mar. 2016
Mar. 2017
Mar. 2018
*1 Sources: U.S. from U.S. Department of Commerce, Europe from Eurostat, Emerging, developing Asia from IMF, Japan from Cabinet Office, Government of Japan
*2 Sources: Bloomberg
Summary of consolidated results
Net revenue for the fiscal year ended March 31, 2018 was
¥1,497 billion, up 6.7% from the previous fiscal year, and
non-interest expenses was ¥1,168.8 billion, up 8.2% from
the previous fiscal year. Income before income taxes was
¥328.2 billion, and net income attributable to Nomura
Holdings shareholders was ¥219.3 billion. EPS for the
current fiscal year (Diluted net income attributable to
Nomura Holdings shareholders per share) was ¥61.88.
(billions of yen)
FY2016/17
FY2017/18
Year-on-year
Comments
Revenue Commission
327.1
373.3
14.1% Brokerage commissions and commissions for
distribution of investment trusts increased due
to the increase in sales in stock and
investment trusts.
Fees from investment banking
92.6
101.7
9.8% Revenue from solutions businesses
accompanying M&A and finance increased.
Asset management and portfolio
service fees
216.5
245.6
13.5% Asset management fees increased due to the
increase in assets under management by
inflows into funds of ETFs and discretionary
investment products.
Net gain (loss) on trading
475.6
442.9
-6.9% Net gain on trading decreased mainly due to
the decrease in sales of Fixed Income
business and losses related to securities
collateralized loan projects.
Gain (loss) on private equity
investments
1.4
-0.9
-
Interest and dividends
!
441.0
!
585.7
32.8%
Gain (loss) on investments in
equity securities
7.7
2.7
-65.2% Unrealized gains (losses) and trading gains
84
(losses) on stocks held for operating purposes
decreased.
Other
153.6
221.2
44.0% Other income increased due to the gains
arising from substantial liquidation of overseas
subsidiaries and the gains from the sale of our
controlling financial interest in Asahi Fire and
Marine Insurance Co., Ltd.
Total revenue
Interest expenses
Net revenue
Non-interest expenses
1,715.5
1,972.2
15.0%
!
312.3
!
475.2
52.1%
1,403.2
1,497.0
6.7%
1,080.4
1,168.8
8.2% Non-interest expenses increased due to the
increase in personnel expenses related to
deferred compensation and the allowance for
over ¥30 billion for the legacy transactions in
the U.S.
¥21,454
Income (loss) before income taxes
322.8
328.2
1.7%
Net income (loss) attributable to Nomura
Holdings shareholders
239.6
219.3
-8.5%
Yen Dollar Exchange
¥106
0.049%
!
As net interest income, which is interest income and dividends minus interest expenses, depends on the level and composition of total assets and
liabilities, including trading assets, repurchase agreement and reverse repurchase agreement transactions, as well as the term structure and
volatility of interest rates, it is one of the integral parts of trading activities.
In the fiscal year ended March 2018, while interest and dividends including dividends from American Century Investments increased, interest
expenses also increased, leading to a year-on-year decrease in net interest income.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Financial Review
85
Divisional performance
Retail Division
There were an increase in transactions of stocks and
investment trusts due to the improvements of customer’s
investment-mind followed by the improvements in the
market environment, net revenue for the fiscal year ended
March 31, 2018 was ¥412.9 billion, up 10% from the
previous fiscal year.
Retail Division has been working to transform its business
model as it aims to grow the business by enhancing client
trust and satisfaction and becoming a financial institution
people turn to. As a result for these efforts, investment
trusts and discretionary investment balance increased,
and recurring revenue, which is a stable income, expanded
to ¥90 billion (annualized amount of the fourth quarter).
Income before income taxes was ¥103.1 billion, up 38%
from the previous fiscal year.
Asset Management Division
Net revenue from Asset Management Division was ¥127.3
billion, up 28% from the previous fiscal year, and income
before income taxes was ¥66.2 billion, a record-high
profit since the fiscal year ended March 2002.
In the current fiscal year, there was a cash inflow of
approximately ¥3.3 trillion, mainly from ETFs,
discretionary investment trusts and domestic investment
advisory business. As a result, assets under
management at the end of March 2018 totaled ¥50
trillion. In addition, income from American Century
Investments boosted revenue in the current fiscal year.
Wholesale Division
Net revenue from Wholesale Division was ¥715.3 billion,
down 3% from the previous fiscal year since the bond
market volatility was weak and the activities of market
participants have become slow, leading the fixed income
International Businesses
International businesses recorded loss before income
taxes of ¥0.7 billion for the fiscal year ended March 31,
2018, a decrease from ¥88.1 billion of income before
income taxes in the previous fiscal year. This is explained
by the provision of allowance for over ¥30 billion for
legacy transactions in the U.S. and recording of an
unrealized loss of approximately ¥14 billion in margin loan
transaction in EMEA.
revenue to decrease significantly. Equity earned
substantial revenue due to rise in stock markets
worldwide. In addition, Investment banking advanced
global collaboration, and by working on many cross-
border deals, sales increased, resulting in an increase in
revenue.
Non-interest expenses other than interest expenses
increased by 6% due to the increase in commissions
paid as the volume of equity business transactions
increased, and also to the deferred compensation
granted on the basis of the previous fiscal year's
performance as a result of the strong performance.
Consequently, income before income taxes was ¥100.6
billion, down 38% from the previous fiscal year.
Income before income taxes by segment
(billions of yen)
300
Wholesale
Asset Management
Retail
278.6
200
100
0
161.4
42.3
74.8
269.9
100.6
66.2
103.1
Consolidated capital adequacy ratio
CET1 capital ratio on a consolidated basis at the end of
March 2018 was 16.5%, down from 18.2% at the end of
March 2017. There are two reasons behind this. One is
that the risk-off environment continued and the risk-
weighted assets at the end of March 2017 was ¥14
trillion, which was extremely low. In the current fiscal year,
we also controlled the risks, but compared to the end of
March 2017, risks have increased mainly of market risks.
The second reason is that CET1 capital, a numerator, has
decreased due to a decline in foreign currency translation
adjustment as a result of the appreciation of the yen and
the effect of the end of transitional measures under Basel
regulations.
In addition, we have targeted the CET1 capital ratio on a
consolidated basis in the medium term as 11% or more,
and we have maintained a sufficient level of capital.
Consolidated capital adequacy ratio
(billions of yen)
FY2016/17
FY2017/18
Year-on-year
Capital
CET1 capital
Tier1 capital
Total capital
Risk-weighted
assets
Credit risk-weighted assets
2,549
2,690
2,799
7,763
2,500
2,666
2,733
7,736
-49
-23
-67
-26
Value obtained by dividing market risk equivalent
assets by 8%
3,505
4,748
1,244
Value obtained by dividing the operational risk
equivalent assets by 8%
2,711
2,638
-73
86
Total risk-weighted assets
13,978
15,122
1,144
Consolidated
capital adequacy
ratio
CET1 capital ratio
Tier1 capital ratio
18.2%
16.5%
-1.7%
19.2%
17.6%
-1.6%
Consolidated capital adequacy ratio
20.0%
18.1%
-1.9%
FY2016/17
FY2017/18
Shareholder returns
Annual dividend per share
International income (loss) before income taxes by region
(billions of yen)
100
Asia and Oceania
Europe
Americas
75
50
25
0
-25
88.1
23.7
14.4
50.0
22.8
-8.8
-14.7
-0.7
FY2016/17
FY2017/18
We believe that basic returns to shareholders will be
implemented through sustained improvements in
shareholder value and dividends. Regarding dividends,
we will make consolidated payout ratio of 30% as one of
the important indicators based on consolidated
performance every half year. Dividends in each year will
be decided by comprehensively taking into account the
trends of domestic and overseas regulatory
environments, including Basel regulations, and our
consolidated results. As a general rule, dividends will be
paid twice a year (Date of record: September 30, March
31).
The firm seeks to deliver to shareholders a total payout
ratio of 50% or more, inclusive of shareholder returns
delivered through buy-back of shares.
(yen)
20
15
10
5
0
20
20
19
17
13
FY2013/14 FY2014/15 FY2015/16 FY2016/17 FY2017/18
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Eleven-Year Consolidated Financial Summary
Eleven-Year Consolidated Financial Summary (US 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 Form 20-F.
FY2007/08
FY2008/09
FY2009/10
FY2010/11
FY2011/12
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
(millions of yen)
Operating results
Revenue:
Commission
Fees from investment banking
Asset management and portfolio service fees
Net gain (loss) on trading
Gain (loss) on private equity investments
Interest and dividends
Gain (loss) on investments in equity securities
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
Other
Total non-interest expenses
Income (loss) before income taxes
Income tax expense (benefit)
Net income (loss)
Less: Net income (loss) attributable to noncontrolling interests
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
157,190
852,167
(64,910)
3,259
(68,169)
(322)
306,803
54,953
140,166
(128,339)
(54,791)
331,356
(25,500)
39,863
664,511
351,884
312,627
491,555
73,681
154,980
78,480
31,638
395,083
121,254
132,249
417,424
11,906
235,310
6,042
37,483
405,463
107,005
143,939
336,503
19,292
346,103
(16,677)
43,864
1,356,751
1,385,492
205,929
254,794
1,150,822
1,130,698
526,238
86,129
175,575
87,806
27,333
518,993
92,088
182,918
87,843
30,153
262,558
142,494
125,448
347,135
59,638
144,251
272,557
25,098
435,890
4,005
563,186
358,210
62,353
141,888
367,979
8,053
394,007
38,686
708,767
473,121
91,301
168,683
476,356
11,392
416,350
15,156
179,485
453,401
95,083
203,387
531,337
5,502
436,766
29,410
175,702
431,959
118,333
229,006
354,031
13,761
440,050
(20,504)
156,460
327,129
92,580
216,479
475,587
1,371
441,036
7,708
153,626
1,851,760
2,079,943
1,831,844
1,930,588
1,723,096
1,715,516
315,901
266,312
274,774
326,412
327,415
312,319
1,535,859
1,813,631
1,557,070
1,604,176
1,395,681
1,403,197
534,648
93,500
177,148
100,891
48,488
496,227
547,591
91,388
179,904
91,545
49,010
570,058
111,849
192,168
80,142
38,485
596,593
129,977
192,300
76,112
35,230
574,191
123,881
189,910
78,411
35,892
496,385
94,495
175,280
69,836
35,111
616,463
202,754
227,205
228,238
209,295
1,092,892
1,045,575
1,037,443
1,450,902
1,575,901
1,195,456
1,257,417
1,230,523
1,080,402
(780,265)
(70,854)
(709,411)
(1,219)
105,247
37,161
68,086
288
67,798
93,255
61,330
31,925
3,264
28,661
84,957
58,903
26,054
14,471
11,583
237,730
132,039
105,691
(1,543)
107,234
361,614
145,165
216,449
2,858
213,591
346,759
120,780
225,979
1,194
224,785
165,158
22,596
142,562
11,012
131,550
322,795
80,229
242,566
2,949
239,617
87
Net income (loss) attributable to NHI shareholders
(67,847)
(708,192)
Balance sheets (Period end)*1
Cash and cash deposits
Loans and receivables
Collateralized agreements
1,434,067
1,187,600
1,422,709
1,643,007
1,352,244
2,071,714
2,150,453
2,227,822
1,953,677
2,211,423
1,652,752
2,629,875
2,189,310
2,570,678
2,096,596
2,948,424
3,898,843
2,969,578
2,972,088
3,097,428
10,391,367
8,412,618
12,467,213
15,156,318
13,742,646
14,115,257
17,347,001
16,719,520
15,077,660
18,729,825
Trading assets and private equity investments
10,278,188
11,672,612
14,700,282
15,241,931
14,123,594
17,124,349
18,714,314
17,308,848
16,410,002
15,192,364
373,313
101,663
245,616
442,885
(869)
585,675
2,683
221,192
1,972,158
475,189
1,496,969
530,641
99,868
184,781
67,895
36,762
248,864
1,168,811
328,158
103,866
224,292
4,949
219,343
2,959,046
3,875,199
16,237,743
14,980,156
2,291,803
88
Other assets
Total assets
Short-term borrowings
Payables and deposits
Collateralized financing
Trading liabilities
Other liabilities
Long-term borrowings
Total liabilities
Total NHI shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
Cash flows
1,944,832
1,686,902
1,638,975
1,916,466
3,665,972
2,420,206
2,699,011
2,709,848
2,734,084
2,860,373
25,236,054
24,837,848
32,230,428
36,692,990
35,697,312
37,942,439
43,520,314
41,783,236
41,090,167
42,852,078
40,343,947
1,426,266
950,381
1,183,374
1,242,318
1,301,664
1,528,419
1,167,077
2,103,608
1,185,613
2,437,370
738,445
602,131
662,256
662,902
543,049
2,413,801
2,836,873
3,398,600
4,249,118
3,708,435
743,497
3,567,655
10,540,731
10,157,954
11,216,481
13,686,438
12,519,274
15,409,383
17,111,999
15,379,803
16,605,591
19,061,091
16,696,994
4,469,942
4,752,054
8,356,806
8,688,998
623,206
467,574
494,983
552,316
5,224,426
5,483,028
7,199,061
8,402,917
7,495,177
1,165,901
8,504,840
8,491,296
11,047,285
10,044,236
978,163
7,592,368
1,141,750
8,227,063
1,217,099
8,336,296
7,499,335
1,200,647
8,129,559
8,191,794
1,308,510
7,195,408
8,202,936
950,534
7,382,507
23,234,952
23,286,302
30,097,414
34,601,354
33,308,175
35,623,456
40,967,101
39,038,290
38,347,152
40,008,287
37,544,123
1,988,124
1,539,396
2,126,929
2,082,754
2,107,241
2,294,371
2,513,680
2,707,774
2,700,239
2,789,916
2,749,320
12,978
12,150
6,085
8,882
281,896
24,612
39,533
37,172
42,776
53,875
50,504
2,001,102
1,551,546
2,133,014
2,091,636
2,389,137
2,318,983
2,553,213
2,744,946
2,743,015
2,843,791
2,799,824
25,236,054
24,837,848
32,230,428
36,692,990
35,697,312
37,942,439
43,520,314
41,783,236
41,090,167
42,852,078
40,343,947
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Effect of initial adoption of investment company accounting on
cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
(647,906)
(102,019)
942,879
(38,427)
(57,319)
97,208
(98,905)
999,760
—
(81,896)
106,330
(712,629)
(1,500,770)
(269,643)
(235,090)
(423,214)
2,176,530
1,284,243
—
964
407,081
—
(26,246)
599,693
*1 Figures for the fiscal years ended March 31, 2008 and 2009 have been restated to reflect the application of new guidelines on accounting for and disclosure of non-controlling
equity positions that are referred to in Position Paper No. 810, entitled “Consolidated Financial Statements.”
290,863
9,942
(844,311)
549,501
(160,486)
(701,623)
457,426
(103,195)
(77,028)
12,337
1,238,372
1,305,025
(23,711)
(118,051)
289,385
(178,206)
986,387
(2,130,644)
—
—
—
—
—
(6,314)
47,175
(549,820)
(265,433)
41,089
684,705
68,513
(40,195)
(174,384)
2,160,853
(939,421)
—
4,249
(445,696)
(56,172)
(373,168)
—
(53,501)
(182,201)
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura ESG Data
89
Environment, social and governance (ESG) Data
Corporate governance
ESG Data
https://www.nomuraholdings.com/csr/data/index.html
Contributing to Sustainable Communities
Data for FY2017/18 items marked with
have undergone assurance verification by a third party.
Members of the Board
Unit
June 30, 2013 June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 June 30, 2018
Community contribution expenditures
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Board of Directors
Outside Directors
Non-Japanese Directors
Female Directors
No. of people
No. of people
Ratio (%)
No. of people
Ratio (%)
No. of people
Ratio (%)
11
6
55
3
27
1
9
11
6
55
3
27
1
9
12
7
58
3
25
1
8
11
6
55
3
27
1
9
10
6
60
1
10
1
10
10
6
60
2
20
2
20
Officers
(Executive Officers and Senior Managing Directors)
Unit
April 1, 2013
April 1, 2014
April 1, 2015
April 1, 2016
April 1, 2017
April 1, 2018
Men
Women
Ratio of women
No. of people
No. of people
%
23
2
8
27
2
6
26
2
7
27
2
7
33
1
3
34
1
3
Board of Directors meetings
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
No. of times held
No. of times
Average attendance rate
Average term of office
%
Year
11
97
2.1
10
98
3.1
10
99
3.8
10
100
3.2
11
99
3.3
10
100
2.7
Contributing to Sound and Sustainable Capital Markets
Caseload at Customer Help Desk
Department (Nomura Securities)
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Total
Complaints
Inquiries
No. of cases
No. of cases
No. of cases
Opinions and requests
No. of cases
Other
No. of cases
5,693
3,409
2,119
23
142
7,010*1
4,023*2
2,730
55
202
5,540
2,537
2,766
81
156
5,767
2,771
2,749
128
119
6,003
2,531
3,267
98
107
7,054
2,479
4,147*3
270
158
*1 The increase in the number of consultations in FY2013/14 is due to an increase in the number of consultations about telephone line congestion.
*2 Of this total, 69 complaints were related to the management of customer information.
*3 The increase in the number of inquiries in FY2017/18 is due to system changes.
Results of customer satisfaction surveys
at branch offices (Nomura Securities)
Unit
December 2013 August 2014
January 2015 February 2016 February 2017 November 2017
Extremely satisfied/satisfied
Neither satisfied nor dissatisfied
Extremely dissatisfied/dissatisfied
%
%
%
81.6
15.7
2.7
81.4
16.3
2.2
80.9
16.3
2.8
82.1
15.1
2.8
83.7
14.3
2.0
85.5
13.0
1.5
Total
Millions of yen
1,348
1,323
1,457
1,325
1,704
1,224
Education
Millions of yen
Arts, culture, and sports
Millions of yen
Science and academic achievement Millions of yen
Community contribution
Millions of yen
Welfare and health
Environment
Millions of yen
Millions of yen
Human rights and labor
Millions of yen
Disaster relief
Other
Millions of yen
Millions of yen
556
81
129
199
79
47
4
88
171
604
66
117
190
39
84
20
78
129
530
333
114
161
85
34
19
68
113
562
102
120
162
79
29
39
56
176
451
567
116
189
53
71
12
61
184
407
157
109
261
33
59
6
9
185
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Participants and materials in financial
and economics education
Visiting classes (elementary, junior,
senior high schools, universities,
teachers) Since 2008
Financial courses for universities
Since 2001
Financial courses for the general
public Since 2003
No. of schools
No. of participants
No. of schools
No. of participants
No. of courses
31
1,865
114
11,000
444
56
2,825
112
11,000
531
No. of participants
21,696
23,897
Nikkei Stock League
Since 2000
Number of educational materials
supplied*
No. of teams
No. of members
No. of schools
No. of copies
1,287
5,120
783
1,484
5,699
442
265
9,836
108
11,000
566
24,712
1,361
5,167
527
304
9,637
106
11,000
412
14,958
1,429
5,587
440
346
15,317
104
11,200
304
10,926
1,618
6,462
434
442
19,377
106
11,000
270
8,105
1,832
7,180
470
34,748
26,801
39,550
27,305
30,167
37,163
* The numbers of educational materials Nomura Holdings donated and sent to elementary and junior high schools were totaled.
90
Developing human resources who respect diversity
Education and training expenses
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Total
Japan
Europe
Americas
Asia-Pacific
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Millions of yen
2,441
1,907
108
233
193
2,515
1,978
81
262
194
2,972
2,076
115
573
208
2,880
2,020
225
426
209
2,767
2,094
161
299
213
2,987
2,093
228
435
230
Participation in education and
training*
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Bonds issued
Proceeds
Sustainability bonds*
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Total
Number
9
8
5
4
5
20
Aggregate no. of hours
Aggregate no. of participants
254,117
22,048
406,602
89,657
507,639
132,672
Millions of yen
53,619
498,768
110,331
52,133
59,226
220,997
Japan
Aggregate no. of hours
208,087
284,920
333,305
* ESG bonds in which Nomura Securities is involved
Aggregate no. of participants
12,081
Europe
Aggregate no. of hours
Aggregate no. of participants
Americas
Aggregate no. of hours
Aggregate no. of participants
Asia-Pacific
Aggregate no. of hours
Aggregate no. of participants
1,732
647
7,204
1,794
37,094
7,526
12,325
26,117
21,822
7,811
5,598
87,754
49,912
14,398
48,434
41,654
15,439
12,255
110,461
64,365
499,386
211,014
307,295
16,294
47,709
62,077
17,589
25,122
126,793
107,521
501,377
195,819
530,869
277,824
303,854
298,571
15,581
33,638
44,325
15,848
19,816
148,037
116,097
14,896
49,288
70,240
23,139
38,169
159,871
154,519
* Figures for Europe, the Americas and Asia-Pacific do not cover certain subsidiaries and the like because attended educations and trainings the Wholesale Division manages
through an in-house training system are totaled.
Total hours for educations and trainings attended in FY2015/16 and FY2016/17 (hr.), which are stated in the total column and the Europe column, are revised as follows based
on a close examination of data for prior fiscal years. Total education and training hours in the total column: revised from 589,242 to 499,386 and from 562,289 to 501,377. Total
education and training hours in the Europe column: revised from 137,565 to 47,709 and from 94,550 to 33,638.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura ESG Data
ESG Data
https://www.nomuraholdings.com/csr/data/index.html
Data for FY2017/18 items marked with
have undergone assurance verification by a third party.
Developing human resources who respect diversity
Composition of employees*1
FY2012/13
Unit
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Total
No. of employees
26,242
26,019
28,672
28,865
28,186
28,048
Ratio of male employees (%)
Ratio of female employees (%)
62
38
62
38
62
38
62
38
61
39
61
39
Japan
No. of employees
15,004
15,062
15,973
16,083
16,227
15,819
Our environment
GHG emissions
Scope 1: Direct
emissions*1
Ratio of male employees (%)
Ratio of female employees (%)
57
43
56
44
58
42
58
42
58
42
57
43
Scope 2: Indirect
emissions*1
Europe
No. of employees
3,618
3,461
3,485
3,424
3,026
3,057
Ratio of male employees (%)
Ratio of female employees (%)
70
30
71
29
71
29
71
29
70
30
70
30
Americas
No. of employees
2,271
2,281
2,449
2,503
2,314
2,362
Ratio of male employees (%)
Ratio of female employees (%)
74
26
74
26
74
26
74
26
74
26
74
26
Asia-Pacific
No. of employees
5,349
5,215
6,765
6,855
6,619
6,810
Ratio of male employees (%)
Ratio of female employees (%)
65
35
64
36
61
39
61
39
59
41
60
40
Number of new hires*2
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Total
No. of employees
2,554
2,920
2,934
2,868
2,763
2,901
Ratio of male employees (%)
Ratio of female employees (%)
-
-
-
-
Japan
No. of employees
1,027
1,029
91
Ratio of male employees (%)
Ratio of female employees (%)
Europe
No. of employees
Ratio of male employees (%)
Ratio of female employees (%)
Americas
No. of employees
Ratio of male employees (%)
Ratio of female employees (%)
Asia-Pacific
No. of employees
Ratio of male employees (%)
Ratio of female employees (%)
43
57
307
-
-
361
-
-
859
-
-
67
33
845
57
43
510
76
24
510
75
25
65
35
932
58
42
405
71
29
424
74
26
57
43
61
39
1,107
1,008
53
47
283
67
33
318
71
29
54
46
376
69
31
355
74
26
49
51
503
-
-
418
-
-
970
1,069
1,107
1,055
1,162
-
-
67
33
64
36
54
46
60
40
Composition of managers*3
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Water consumption
Total
No. of employees
8,079
7,944
8,329
8,535
9,110
9,174
Ratio of male employees (%)
Ratio of female employees (%)
87
13
87
13
85
15
84
16
85
15
84
16
Japan
No. of employees
3,768
3,698
3,673
3,615
4,672
4,493
Ratio of male employees (%)
Ratio of female employees (%)
94
6
94
6
94
6
93
7
92
8
91
9
Europe
No. of employees
1,872
1,797
1,790
1,838
1,559
1,624
Ratio of male employees (%)
Ratio of female employees (%)
83
17
84
16
83
17
82
18
81
19
81
19
Americas
No. of employees
1,250
1,262
1,343
1,399
1,279
1,366
Ratio of male employees (%)
Ratio of female employees (%)
81
19
81
19
81
19
80
20
80
20
80
20
Asia-Pacific
No. of employees
1,189
1,187
1,523
1,683
1,600
1,691
Ratio of male employees (%)
Ratio of female employees (%)
76
24
76
24
71
29
71
29
70
30
70
30
*1 Employee composition: The Nomura Group is the scope of the totaling (on a consolidated basis). Data for FY2013/14 and prior fiscal years do not cover certain subsidiaries.
*2 New hire composition: The Nomura Group is the scope of the totaling (on a consolidated basis). Data for FY2015/16 and prior fiscal years for Japan cover Nomura Holdings and Nomura
Securities. Data for FY2015/16 and prior fiscal years for Asia-Pacific cover consolidated subsidiaries with certain exceptions, such as Capital Nomura Securities Public Company Limited
and Nomura Asset Management Taiwan Ltd which were added to the scope of consolidation in FY2014/15.
*3 Management composition: The Nomura Group is the scope of the totaling (on a consolidated basis). Data for FY2015/16 and prior fiscal years do not cover certain subsidiaries in Japan.
Refer to standards for calculation (https://www.nomuraholdings.com/csr/data/index.html).
Japan
Europe
Americas
Asia-Pacific
Japan
Europe
Americas
Asia-Pacific
Japan
Europe
Americas
Asia-Pacific
Unit
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
t-CO2
Scope 1, 2: Emissions
per employee*1
Scope 3: Emissions
from employee travel*2
(Air, rail, and automobile
travel)
Japan
Europe
Americas
Asia-Pacific
t-CO2*3
Energy consumption
Direct energy
consumption
(Natural gas, etc.)
Indirect energy
consumption
(Purchased electric
power)
Japan
Europe
Americas
Asia-Pacific
Japan
Europe
Americas
Asia-Pacific
Including, Green power purchased*4
(Purchased cooling and
heating power)
Japan
Europe
Americas
Asia-Pacific
Unit
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
2,107
1,986
2,005
1,968
2,247
1,318
0
76
38,988
16,842
6,278
24,323
2.8
6.2
2.8
5.4
2,207
1,131
46
143
42,300
17,334
5,015
21,601
3.0
6.0
2.2
4.9
797
69
143
40,965
14,164
6,406
22,007
2.9
4.6
2.6
4.3
752
72
169
39,065
12,822
6,966
21,892
2.7
4.3
2.8
4.2
772
72
173
36,783
11,786
6,168
20,942
2.5
4.2
2.7
4.2
17,919
18,729
20,823
22,013
22,936
9,728
5,124
11,057
9,253
5,561
9,552
8,127
4,349
7,651
4,966
10,575
11,587
7,023
4,343
11,041
784
73
167
35,302
10,031
5,510
19,800
2.4
3.6
2.4
3.8
24,554
7,929
5,547
12,196
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
11,948
7,025
0
800
74,293
38,679
16,104
28,012
6,329
17,523
0
7,924
1,907
11,729
6,210
225
608
74,117
41,164
15,896
26,942
6,317
15,258
0
2,220
1,731
11,229
4,438
340
611
72,780
30,836
22,148
27,862
32,626
12,400
0
238
10,573
4,201
355
732
70,520
30,133
21,882
26,720
34,652
11,971
0
140
10,654
4,329
359
743
68,372
30,713
20,236
25,577
35,033
12,320
0
198
10,402
4,374
360
720
67,360
30,135
18,883
24,200
34,193
11,680
0
254
1,694
1,617
1,723
1,824
92
Environmental resource efficiency
Unit
FY2012/13
FY2013/14
FY2014/15
FY2015/16
FY2016/17
FY2017/18
Japan
Europe
Thousand m3
Thousand m3
Americas
Thousand m3
Asia-Pacific Thousand m3
178
124
4
45
759
177
124
13
45
746
1,904
2,659
171
97
26
48
1,041
2,281
170
115
30
36
1,083
2,540
168
107
29
35
1,018
2,658
161
111
30
53
1,002
2,403
Copy paper consumption*5
Amount of waste generated*6
ton
ton
Scopes 1, 2 and 3 are classified in accordance with classifications established in the Greenhouse Gas Protocol (GHG Protocol; http://www.ghgprotocol.org).
The scopes of the tallies in respective regions are as follows. Data for all bases are totaled for air travel in Scope 3.
Japan: Group companies located in Japan (https://www.nomuraholdings.com/company/group/index.html)
Europe: offices located in London, Paris, Frankfurt, Zurich, Madrid, Milan, Luxemburg and Cape Town
Americas: offices located in New York and bases that belong to Instinet
Asia-Pacific: offices located in Hong Kong, Singapore, India, Dalian and Bangkok
*1 The Bangkok office was added to emissions in Asia-Pacific in FY2014/15. The Cape Town office was added to emissions in Europe in FY2017/18.
*2 Emissions quotas for air and long-distance rail travel in Japan and overseas purchased from designated agents are totaled. Data for regularly-used vehicles are also totaled for Japan,
Europe and Asia-Pacific offices in India, Hong Kong and Bangkok.
*3 The guaranteed scope for Asia-Pacific was 11,002 t-CO2 recorded in FY2017/18 (equivalent to the total for offices in Hong Kong, Singapore, India and Bangkok).
*4 Figures for Japan, and the Frankfurt and Zurich offices in Europe were totaled in FY2012/13. Figures for the Milan office in Europe were added to the scope of the totaling in FY2013/14.
Figures for the London office in Europe were added to the scope of the totaling in FY2014/15. Figures for the Luxemburg office and the Paris office in Europe were added to the scope of
the totaling in FY2015/16.
*5 Figures for Nomura Securities in Japan, which purchased paper from designated agents, and figures for the London office in Europe and the India and Hong Kong offices in Asia-Pacific
were totaled in FY2012/13 and FY2013/14. Figures for the Bangkok office in Asia-Pacific were added to the scope of the totaling in FY2014/15. Nomura Securities expanded the scope of
its tally from A4-size paper to all types of coping paper in the same fiscal year.
*6 Figures for offices in Tokyo (the Nihonbashi Head Office Building and the Dai-ni Edobashi Building), the Osaka Branch, the Nagoya Branch, the London office, the Paris office, the
Frankfurt office, the Zurich office and the India office were totaled in FY2012/13. Figures for another office in Tokyo (the Urbannet Otemachi Building), the Kyoto Branch, the Okayama
Branch and the Hong Kong office were added to the scope of the totaling in FY2013/14. Figures for the Luxemburg office were added to the scope of the totaling in FY2014/15. Figures for
one additional office in Tokyo (the Nomura Asset Management Head Office Building) were added to the scope of the totaling in FY2015/16.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura Independent Assurance / Key Events during the Year
Translation
The following is an English translation of an independent assurance report prepared in Japanese and is for information
and reference purposes only. In the event of a discrepancy between the Japanese and English versions, the Japanese
version will prevail.
Independent Assurance Report
June 29, 2018
TO:
Mr. Koji Nagai
Group CEO
Nomura Holdings, Inc.
Kenji Sawami
Engagement Partner
Ernst & Young ShinNihon LLC(cid:3) Tokyo, Japan
We, Ernst & Young ShinNihon LLC, have been commissioned by Nomura Holdings, Inc. (hereafter the “Company”) and
has carried out a limited assurance engagement on the Key Sustainability Performance Indicators (hereafter the
"Indicators") of the Company and its major subsidiaries for the year ended March 31, 2018(cid:16076) as included in “ESG Data ”
(hereafter the “Report”). The scope of our assurance procedures was limited to the Indicators marked with the symbol
“
1． The Company's Responsibilities
” in the Report.
The Company is responsible for preparing the Indicators in accordance with the Company’s own criteria, that it
determined with consideration of Japanese environmental regulations and other regulations as presented in
“Citizenship－ESG Data－Standards for Calculation” (http://www.nomuraholdings.com/csr/data/).
Greenhouse gas (GHG) emissions are estimated using emissions factors, which are subject to scientific and
estimation uncertainties given different instruments for measuring GHG emissions may vary in characteristics, in
terms of functions and assumed parameters.(cid:16076)
2． Our Independence and Quality Control
We have met the independence requirements of the Code of Ethics for Professional Accountants issued by the
International Ethics Standards Board for Accountants in January 2017, which is based on the fundamental
principles of integrity, objectiveness, professional competence and due care, confidentiality, and professional
behavior.
In addition, we maintain a comprehensive quality control system, including documented policies and procedures
for compliance with ethical rules, professional standards, and applicable laws and regulations in accordance with
the International Standard on Quality Control 1 issued by the International Auditing and Assurance Standards
Board in April 2009.
3． Our responsibilities
93
Our responsibility is to express a limited assurance conclusion on the Indicators included in the Report based on
the procedures we have performed and the evidence we have obtained.
We conducted our limited assurance engagement in accordance with the International Standard on Assurance
Engagements: Assurance Engagements Other than Audits or Reviews of Historical Financial Information (“ISAE
3000”) (Revised), issued by the International Auditing and Assurance Standards Board(cid:16076) in December 2013,
Practical Guidelines for the Assurance of Sustainability Information, revised in December 2014 by the Japanese
Association of Assurance Organizations for Sustainability Information and, with respect of GHG emissions,
Assurance Engagements on Greenhouse Gas Statements (“ISAE 3410”), issued by the International Auditing
and Assurance Standards Board in June 2012.
The procedures, which we have performed according to our professional judgment, include inquiries, document
inspection, analytical procedures, reconciliation between source documents and Indicators in the Report, as well
as the following:
• Making inquiries regarding the Company’s own criteria that it determined with consideration of Japanese
environmental regulations(cid:16076)and other regulations, and evaluating the appropriateness thereof;
Inspecting relevant documents with regard to the design of the Company’s internal controls related to the
Indicators, and inquiring of personnel responsible thereof at the Company and major subsidiary’s 2 sites
visited;
Performing analytical procedures concerning the Indicators at the Company and major subsidiary’s 2 sites
visited;
Testing, on a sample basis, underlying source information and conducting relevant re-calculations at the
Company and major subsidiary’s 2 sites visited.
•
•
•
The procedures performed in a limited assurance engagement are more limited in nature, timing and extent than
a reasonable assurance engagement.
As a result, the level of assurance obtained in a limited assurance engagement is lower than would have been
obtained if we had performed a reasonable assurance engagement.
4． Conclusion
Based on the procedures performed and evidence obtained, nothing has come to our attention that causes us to
believe that the Indicators included in the Report have not been measured and reported in accordance with the
Company’s own criteria that it determined with consideration of Japanese environmental regulations and other
regulations.
2017
Apr.
Management topics
Established N-Village, a subsidiary to promote new business
development and open innovation
Management topics
Established Policy on Customer-Oriented Business Conduct
Management topics
Launched VOYAGER: Nomura FinTech Partnership program in India
May
Assessments
Selected as Competitive IT Strategy Company 2017 by Ministry of
Economy, Trade and Industry, and Tokyo Stock Exchange
June
Management topics
Established new company in Germany to minimize the impact for
clients from the UK’s exit from the EU and to continue providing
financial services as before, and began applying for a formal application
for a license in Germany
July
ESG
Selected as a component of the FTSE Blossom Japan Index
Sept.
ESG
Selected as a component of the Dow Jones Sustainability World Index
(DJSI World Index) and the DJSI Asia Pacific Index, global stock indices
that measure socially responsible investment
Management topics
Established innovation office in San Francisco to further enhance
promotion and support of financial innovation and new business
Oct.
Financials
Completed share buyback program (100 million shares; about ¥62.3 billion)
Management topics
Adopted “Nomura’s Declaration to Support Employees Balance Work
and Family Care”
Nov.
Assessments
Awarded “IT Management Prize” by Japan Institute of Information
Technology
Financials
Established Policy for Cancellation of Treasury Shares
Management topics
Decided to establish Merchant Banking Division for overseeing
Nomura's principal investment business
Dec.
ESG
Selected as a component of the MSCI Japan Empowering
Women Index (WIN)
2018
Jan.
Management topics
Nomura Securities Co., Ltd. declared itself a “100-year life
partner” that aims to provide optimal financial services to solve
customers’ problems in Japan’s longevity society
Financials
Completed share buyback program (70 million shares; about ¥46.7 billion)
Feb.
Services
Launched online account opening service using “Japanese Public Key
Infrastructure”
ESG
The Nomura Institute of Capital Markets Research established a
dedicated research group to focus on the sustainable development of
the ESG bond market
Mar.
Management topics
Concluded basic agreement to start examining financial business
alliance with LINE Corporation
Management topics
Nomura Asset Management agreed to acquire shares of 8 Securities
and 8 Limited through a third-party allotment
94
Key Events
during the Year
The Nomura Group is facing dramatic
structural changes such as low fertility
rates and the aging population in
Japan, and increasing digital
innovation. Looking 10 or 20 years
ahead, we accelerated initiatives to
further strengthen the Nomura Group’s
business foundations, including
launching the principal investment
business, starting to examine a
business alliance with LINE
Corporation which has a strong
asset-building user base, and investing
in the 8 Group which is skilled in
mobile app development.
We are also actively involved in ESG
(Environmental, Social, and
Governance) activities. The Nomura
Group has been included in various
ESG indices, and the Nomura Institute
of Capital Markets Research also
established a dedicated research
group to focus on the sustainable
development of the ESG bond market.
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura
Global Network / Services for Retail Client
Global Network (As of June 30, 2018)
The Nomura Group, as Asia’s global investment bank, has a global network spanning more than 30 countries and regions.
Services for Retail Clients
Europe, the Middle East and Africa
London
Amsterdam
Vienna
Stockholm
Zurich
Paris
Frankfurt
Helsinki
Madrid
Subsidiary*
Subsidiary
Representative office
Branch
Subsidiary
Subsidiary
Subsidiary
Branch
Branch
Milan
Luxembourg
Istanbul
Qatar
Dubai
Bahrain
Riyadh
South Africa
Branch
Subsidiary
Representative office
Branch
Branch
Subsidiary
Subsidiary
Branch
Branch*
Branch*
Branch*
Stockholm
Helsinki
Luxembourg
Amsterdam
London
Paris
Frankfurt
Vienna
Zurich
Milan
Madrid
Istanbul
Bahrain
Riyadh
Dubai
Qatar
Japan / Asia ex-Japan
Cape Town
95
Representative office
Branch
Branch
Subsidiary
Subsidiary
Subsidiary*
Representative office
Representative office
Head offices, branches and offices 156
Hong Kong
Beijing
Shanghai
Taipei
Seoul
Mumbai
Hanoi
Jakarta
Kuala Lumpur
Philippines
Bangkok
Singapore
Sydney
Melbourne
Representative office
Representative office
Subsidiary*
Subsidiary*
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Beijing
Seoul
Shanghai
Hong Kong
Hanoi
Taipei
Japan
Mumbai
Bangkok
Philippines
Kuala Lumpur
Singapore
Jakarta
Sydney
Melbourne
San Francisco
Chicago
Toronto
Boston
New York
Los Angeles
Manhattan Beach
St. Louis
Washington, D.C.
Bermuda
Colombia
Americas
New York
Washington, D.C.
Boston
Chicago
Manhattan Beach
San Francisco
Los Angeles
St. Louis
Toronto
Colombia
São Paulo
Bermuda
Subsidiary*
Branch*
Branch
Branch*
Branch*
Branch
Branch*
Branch*
Branch*
Subsidiary*
Representative office
Representative office
Subsidiary
São Paulo
*Includes subsidiaries and branches of Instinet
Consulting Services
Call Center
Online Services
Provide tailored consulting services to
each client through Nomura’s head office
and nationwide network of 156 branch
offices
Provide a wide range of services to
clients who have existing accounts at
Nomura, as well as new potential clients
Provide access to information and
convenient tools through a broad range
of devices. Clients with accounts in
Nomura can execute various transactions
through their individual web interface
Client
Real estate
Asset Management
Insurance
Loan
Business succession
Estate planning, Bestowing
gifts / Testamentary trust
Nomura’s call center and internet service was awarded a ‘five
star’ rating by the Help Desk Institute for four consecutive
years for its defined contribution pension plan services
Website exclusive for each subscriber of
individual-type defined contribution pension
plan (iDeCo)
Transaction orders
Market outlook and investment consulting
(reservation required)
Individual-type defined contribution pension
plan (iDeCo) information and services
Administrative functions, including new account
opening services
Website exclusive for each subscriber of
employee stock ownership plan
Nomura Securities: 156 branches in Japan
(As of June 30, 2018)
96
Hokuriku
4 branches
Chubu
16 branches
Kinki
27 branches
1 private banking office
Chugoku
8 branches, 1 office
Shikoku
4 branches
Kyushu
10 branches
Hokkaido
4 branches, 1 office
Tohoku
8 branches, 1 office
Kanto
35 branches
Tokyo metropolitan area
1 Head office, 33 branches
1 private banking office
Branches operating after 5 p.m. / Saturday and Sunday
Keio Shinjuku Branch
Machida Branch
(Wednesday)
Branches operating
after 5 p.m.
Saturday
and Sunday
Branches operating
after 5 p.m.
Fuchu Branch
Funabashi Branch
Gifu Branch
Hirakata Branch
Hiratsuka Branch
Hiroshima Branch
Kichijoji Branch
Matsudo Branch
Matsuyama Branch
Third Saturday
Okinawa
1 branch
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura
Corporate Data / Share Information / Stock Price / Credit Rating
Corporate Data
Company name
Date of incorporation
Head office
Paid-in capital
Group employees
Common stock issued
Number of shareholders
Listing
Nomura Holdings, Inc.
December 25, 1925
1-9-1, Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan
¥594,493 million
28,048
3,643,562,601 shares
373,524 (Unit shareholders: 352,148)
The common shares of Nomura Holdings, Inc. are listed on the Tokyo,
Nagoya, and Singapore stock exchanges. The shares are also listed on
the NYSE in the form of American Depositary Shares (ADSs) evidenced
by American Depositary Receipts (ADRs). Each ADS represents one
share of common stock.
Securities code
8604 (Tokyo Stock Exchange), NMR (New York Stock Exchange)
Transfer agent and registrar
Mitsubishi UFJ Trust and Banking Corporation Corporate Agency
Department
Depositary for American Depositary Receipts (ADRs) The Bank of New York Mellon
Date of record for dividend payments
September 30, March 31
Share Information (As of March 31, 2018)
Major shareholders (Top 10)*1
97
Name of shareholder
Japan Trustee Services Bank, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
State Street Bank West Client-Treaty 505234
Japan Trustee Services Bank, Ltd. (Trust Account 5)
Japan Trustee Services Bank, Ltd. (Trust Account 1)
Japan Trustee Services Bank, Ltd. (Trust Account 2)
Japan Trustee Services Bank, Ltd. (Trust Account 7)
Northern Trust Co. (AVFC) Re Silchester International Investors International Value Equity Trust
JP Morgan Chase Bank 385151
Japan Trustee Services Bank, Ltd. (Trust Account 9)
Number of
shares owned
(thousands)*2
168,204
158,790
65,993
64,838
48,118
47,496
45,040
44,183
44,129
43,253
Ownership
(%)*2
5.0%
4.7%
1.9%
1.9%
1.4%
1.4%
1.3%
1.3%
1.3%
1.3%
*1 The Company has 250,285 thousand shares of treasury stock as of March 31, 2018 which is not included in the major shareholders list above.
*2 Figures for number of shares owned are rounded down to the nearest thousand and figures for percentage of shares owned are calculated excluding treasury stock.
Component ratio of shareholders
(unit share base)
Individuals and others
(including treasury stock)
34.0%
Financial institutions
(including Financial instruments firms)
26.2%
Foreign legal entities
36.1%
Other legal entities
3.8%
Total Shareholder Return (TSR)*1
Nomura Holdings
TOPIX
TSR (annual average)
Holding Period*2
1 year
3 year
5 year
Nomura Holdings -8.20% -1.66% 4.14%
TOPIX
15.92% 5.82% 12.91%
Relative value of stock price with dividends reinvested, assuming
the closing price of stock on March 29, 2013 was set at 1.
2.5
2.0
1.5
1.0
0.5
0
Mar. 2013
Mar. 2014
Mar. 2015
Mar. 2016
Mar. 2017
Mar. 2018
*1 TSR: Total shareholder return, combining capital gains and dividend. Dividend is to be reinvested. Source: Nomura, based on Bloomberg
*2 Holding period until March 31, 2018
Credit Rating (As of June 30, 2018)
R&I
JCR
Moody’s
Standard & Poor’s
Fitch Ratings
Nomura Securities
Nomura Holdings
Long-term
Short-term
Long-term
Short-term
A+
AA-
A3
A
A-
a-1
-
P-2
A-1
F1
A+
AA-
Baa1
A-
A-
a-1
-
-
A-2
F1
98
Basic Information in the Report
Period covered
April 1, 2017 to March 31, 2018 (Some content may be outside this time frame)
Reporting cycle
Once a year
Previous
Current
Entities covered
August 2017
August 2018
Nomura Holdings, Inc. and its major subsidiaries and affiliates
https://www.nomuraholdings.com/company/group/
Numerical data are presented alongside information on the scope of companies
covered
Reference guidelines • GRI Standards (2016)
This report contains information regarding the standard disclosure items
contained in the GRI Standards (2016). Please access the following URL on
our corporate website for our GRI Standards (2016) Index.
https://www.nomuraholdings.com/csr/gri/index.html
• Environmental Reporting Guidelines (2012 Version) of Japan’s Ministry of the
Environment
• Charter of Corporate Behavior of Keidanren
Nomura Holdings, Inc.
INQUIRIES
Investor Relations
Urbannet Otemachi Building, 2-2-2,
Otemachi, Chiyoda-ku,
Tokyo 100-8130, Japan
Tel: +81 (3) 5255-1000 (Main switchboard)
Corporate Citizenship Department
Otemachi Nomura Building, 2-1-1, Otemachi,
Chiyoda-ku, Tokyo 100-8170, Japan
Tel: +81 (3) 5255-1000 (Main switchboard)
e-mail: csr@jp.nomura.com
Nomura Report 2018Corporate Information / DataStrengths Supporting Value CreationStrategies for Value CreationAbout Nomura (cid:36) (cid:46) (cid:58) (cid:44)
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