Release Date: April 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Net operating revenues for the fourth quarter of 2024 increased by 7.9% to JPY174.2 billion.
• The Wealth Management Division achieved a record high net increase in stock investment trust of JPY174.6 billion.
• Global Investment Banking posted record net operating revenue and ordinary income growth, driven by large primary deals and higher M&A revenues.
• The full-year dividend payout ratio reached a record high of 51.1%, with a total payout ratio of 83.6% including share repurchases.
• Ordinary income for the full year topped JPY200 billion for the first time since 2005, indicating solid results in line with the Medium-Term Management Plan.

Negative Points

• Ordinary income for the fourth quarter decreased by 19.1% to JPY51 billion.
• Profit attributable to owners of parent fell by 35.8% to JPY29.9 billion.
• The Asset Management Division recorded a decline in ordinary income.
• Overseas operations saw a 25.4% decrease in ordinary income, particularly affected by declines in the Americas.
• Global Markets experienced a 10.6% drop in net operating revenue, with FICC revenues declining due to high volatility in US interest rates.

Q & A Highlights

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Q: Can you provide an overview of Daiwa Securities Group's financial performance for the fourth quarter of 2024? A: Kotaro Yoshida, CFO, explained that net operating revenues for Q4 2024 were JPY174.2 billion, a 7.9% increase from the previous quarter. However, ordinary income decreased by 19.1% to JPY51 billion. The Wealth Management Division saw a record net increase in stock investment trust, while Global Investment Banking posted record net operating revenue and ordinary income growth.

Q: How did the Wealth Management Division perform, and what were the key drivers? A: The Wealth Management Division reported net operating revenues of JPY66.4 billion, up 0.6%, and ordinary income of JPY23.1 billion, up 10.1%. Key drivers included increased equity revenues from large primary deals and high levels of distribution commission for investment trusts. The division's asset-based revenues accounted for 47.3% of its net operating revenues.

Q: What were the results for the Asset Management Division, particularly in Securities Asset Management? A: Securities Asset Management recorded net operating revenue of JPY14.9 billion, down 1.2%, with ordinary income flat at JPY7 billion. Daiwa Asset Management secured a net inflow of JPY407 billion in publicly offered stock investment trusts, excluding ETFs.

Q: How did the Global Markets and Investment Banking Division perform? A: In Global Markets, net operating revenue was JPY36 billion, down 10.6%, with ordinary income decreasing by 30.3%. However, Global Investment Banking saw net operating revenue increase by 1.6% to JPY25.8 billion, and ordinary income rose by 25.5% to JPY6.9 billion, driven by large-scale equity underwriting deals and increased M&A revenues.

Q: What strategic initiatives are being prioritized to maximize customer asset value? A: The group is focusing on offering optimal portfolio proposals based on customers' total assets to build an earnings base less susceptible to market fluctuations. This includes continued implementation of total asset consulting and leveraging structural changes in the Japanese economy, such as the shift from savings to investments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.