Daiwa Securities Group (8601) Q1 2025 earnings summary

Executive summary

• Net operating revenue for Q1 FY2024 was ¥149.1 billion, up 11.2% year-over-year but down 9.4% sequentially; profit attributable to owners was ¥23.9 billion, up 1.2% year-over-year but down 39.4% quarter-over-quarter.

• Ordinary income was ¥37.7 billion, up 4.6% year-over-year but down 33.5% sequentially.

• Wealth Management segment achieved record-high wrap account assets and recurring profit, with total client assets at a record ¥91.5 trillion.

• Asset Management segment reached record-high assets under management, though profit declined due to one-off costs.

• Global Markets & Investment Banking saw declines in both revenue and profit, impacted by lower client activity and higher overseas M&A costs.

Financial highlights

• Commissions received were ¥93.4 billion, down 10% sequentially; brokerage commissions fell 21.2% sequentially but rose 6.3% year-over-year to ¥23.1 billion.

• Net trading income rose 2.2% sequentially and 34.3% year-over-year to ¥27.5 billion.

• SG&A expenses were ¥114 billion, up 10.3% year-over-year, mainly due to higher personnel and trading-related costs.

• EPS was ¥17.10 for the quarter (diluted: ¥16.76).

• Annualized ROE was 6.3%.

Outlook and guidance

• Base income from core divisions was ¥31 billion, up about 20% year-over-year, supporting a stable earnings base.

• Wealth Management continues to focus on recurring, balance-based revenue, with strong July sales in fund wrap and investment trusts.

• No earnings forecast disclosed due to market uncertainties; dividend policy targets a payout ratio of 50% or more, with a minimum annual dividend of ¥44 per share through FY2027.

• Management expects positive PL in investment banking as deal pipelines materialize in later quarters.