Nomura Is Outlier as Most Japanese Securities Companies Report Higher ROEs for July-September

With results out from all companies on Friday, we estimate that Japan’s securities industry as a whole had a return on equity, or ROE, of around 6% for July-September, compared with around 7% in the previous quarter. Excluding the JPY 39 billion provision Nomura posted this quarter for transactions prior to the global financial crisis, we estimate the sectorwide ROE was around 8%. Daiwa’s ROE rose from 7.1% to 8.0%, SMBC Nikko’s from 6.4% to 7.7%, Mizuho Securities from 8.9% to 13.0% (benefitting from the removal of around JPY 400 billion in excess capital from the unit earlier this year for use elsewhere in the Mizuho group), and Mitsubishi UFJ Securities from negative 5.8% to 5.1%.