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WRAPUP 5-Nomura books $2.2 bln Q4 loss, hit by Lehman costs |
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Published: 23 Apr 2009 23:13:14 PST
* Loss due in large part to Lehman-related costs
* Nomura shares end up 1.2 pct ahead of announcement
* Results suggest worst over for stock - asset manager
* Daiwa likely to book $1 bln loss for 2008/09 - Nikkei
TOKYO, April 24 - Nomura Holdings Inc, Japan¡¯s biggest brokerage, posted a $2.2 billion quarterly loss, hit by costs related to its acquisition of parts of Lehman Brothers and investments turned sour amid the financial crisis.
Nomura bought Lehman¡¯s Asian, European and Middle East operations in September shortly after the Wall Street investment bank failed, seeking to build up its global franchise.
But Nomura has been hit by mounting costs to retain Lehman staff and absorb its operations while at the same time suffering from exposure to Iceland¡¯s economic implosion, Fortress Investment Group and accused swindler Bernard Madoff.
Nomura reported a January-March net loss of 217.1 billion yen ($2.2 billion), bigger than a 153.9 billion yen loss a year ago and bringing its annual loss to 709.4 billion yen -- the largest by a Japanese financial institution since the financial crisis.
But the loss was largely in line with an estimate in the Nikkei newspaper on Thursday, and some investors were betting that Nomura may have put most of the bad news behind it.
Shares of Nomura closed up 1.2 percent ahead of the announcement and have gained 50 percent since marking a multi-decade low on March 10.
"The outlook going forward will clearly be dependent on the state of global capital markets, but these results would suggest the worst is over for the stock," said Marc Desdmidt, COO of Asian Equities at BlackRock in Hong Kong.
"Nomura have acquired strong capabilities through the Lehman acquisition, the benefits of which are yet to emerge."
LEHMAN WEIGHS
Nomura said it booked 53.1 billion yen in costs related to acquiring Lehman in January-March, following a similarly sized charge in the October-December period. It also took a 45 billion yen hit on a drop in the value of its real estate holdings.
But Nomura Chief Financial Officer Masafumi Nakada told a news conference that Lehman-related costs would likely drop to around 30 billion yen in the current quarter to the end of June.
Nomura and rival Daiwa Securities Group Inc have also been hurt by the Nikkei average¡¯s slide to a 26-year low last month, which discouraged client firms from issuing shares or making acquisitions.
Japanese companies sold $3.7 billion worth of shares in January-March, 18 percent down on a year earlier.
Daiwa, Japan¡¯s second-biggest brokerage, will likely report a net loss of about 100 billion yen for the year ended in March when it announces results on Tuesday, the Nikkei reported on Friday.
Nomura, which last month sold about $3 billion worth of new shares to strengthen its capital, said it had no immediate plans to raise more funds.
Ahead of the results, Nomura shares closed up 1.2 percent, while the Nikkei fell 1.6 percent.
The Nikkei also said on Friday that Citigroup¡¯s Japanese units -- wholesale brokerage unit Nikko Citigroup and retail brokerage unit Nikko Cordial Securities -- are likely to report a combined net loss of at least 10 billion yen ($102 million) for the last financial year.
Citigroup is in the process of selling some of its Japan operations as part of its global efforts to raise cash.
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