Net income rose 2.7% from a year earlier to 73.9 billion yen in the three months ended March 31.

Nomura Holdings cemented a second straight year of record profit, fuelLed by Japan’s financial-market recovery, even after fourth-quarter results missed analysts’ expectations. 

Net income rose 2.7 per cent from a year earlier to 73.9 billion yen in the three months ended March 31, the Tokyo-based company said Friday. Full-year profit hit an all-time high of 362.1 billion yen.

Japan’s biggest brokerage has been benefiting from volatile global markets and a boom in investing and dealmaking at home. The coming quarters may provide a test for chief executive officer Kentaro Okuda as the Middle East conflict puts a strain on the global economy, while signs of stress in the US$1.8 trillion private credit market cloud his push into alternative assets.

Nomura’s chief financial officer Hiroyuki Moriuchi said that the firm became more conservative in its US macro trading business in the fourth quarter due to the Middle East situation. He said that the economy and financial businesses would be hit if the conflict gets protracted. Already, some deals have been delayed, though there are plenty of M&A and equity capital market deals in the pipeline, Moriuchi said.

The results last quarter were marred by a 2.9 billion yen loss related to “economic hedging” transactions, along with a 6 billion yen loss in equity in earnings of affiliates. 

Nomura’s European operations posted a 13.8 billion yen pretax loss, widening from a loss the previous quarter when its operations there were hit partly because of a setback in the digital-asset market.

Revenue from stock trading rose 26 per cent, climbing for a 12th straight quarter, as it joined Wall Street firms that also posted double-digit gains. Fixed-income revenue rose 18 per cent, the first increase in five quarters. 

Investment-banking revenue increased 6 per cent, extending its growth to a 12th quarter, led by equity underwriting. Wealth management revenue jumped 33 per cent.  

Nomura’s operations outside Japan earned 2.9 billion yen before taxes, marking the 11th straight quarter of profit.

Nomura’s return on equity reached 10.1 per cent for the year, exceeding its target of 8 per cent-10 per cent or more.