Japan's largest brokerage, Nomura Holdings (NMR.US), has raised its profit targets after posting record annual results. The company stated in a presentation to investors on Thursday that it aims to achieve at least 750 billion yen (approximately $4.7 billion) in annual pre-tax profit for the fiscal year ending March 2031. This represents a 50% increase from its previous target of over 500 billion yen. The firm also plans to achieve an annual Return on Equity (ROE) of at least 10% to 12%, a key profitability metric that surpasses its prior goal of "8% to 10% or higher."

CEO Kentaro Okuda is driving the company towards stable growth. In the presentation, Okuda noted that "profitability has continued to improve steadily" since the company unveiled its "Vision 2030" two years ago. He stated, "We will continue to work towards sustainable growth and further enhancing profitability."

Benefiting from a recovery in Japan's financial markets, Nomura Holdings achieved record profits for the second consecutive year, although its fourth-quarter results fell short of analyst expectations. For the three months ended March 31, fourth-quarter revenue was 577.2 billion yen, a 27% increase year-over-year. Full-year total revenue reached 21.7 trillion yen, up 15%. Regarding profitability, net profit for the quarter rose 2.7% year-over-year to 73.9 billion yen (approximately $463 million), which was below the average estimate of 98.9 billion yen from four analysts. However, full-year profit reached a historic high of 362.1 billion yen.

As Japan's largest securities firm, Nomura has consistently benefited from global market volatility and a surge in domestic investment and trading activities. The Japanese market has shown improvement in recent years with the return of inflation and corporate measures to enhance shareholder value. According to aggregated data, merger and acquisition activity in Japan hit a record high last quarter.

However, the Middle East conflict, which is putting pressure on the global economy, along with signs of stress in the $1.8 trillion private credit market, casts a shadow over Okuda's plans to expand into alternative assets and may pose challenges in the coming quarters. The company's Chief Financial Officer noted that due to the Middle East situation, Nomura adopted a more cautious stance in its U.S. macro trading business during the fourth quarter. He indicated that if the conflict persists, economic and financial operations would be impacted. He also mentioned that while a significant number of M&A and equity capital market deals are still in the pipeline, some transactions have experienced delays.