By Thomas Wilson
TOKYO (Reuters) - Nomura Holdings Inc posted its first annual pretax profit in seven years in its overseas business and swung to a fourth-quarter net profit as strong revenues from bond trading helped drive its wholesale business.
Japan's biggest brokerage and investment banking group also announced on Thursday it is buying back its own shares worth up to 80 billion yen ($718.52 million), or 2.6 percent of its outstanding shares.
A profit at its non-Japanese operations has been a long-cherished goal for Nomura, which bought Lehman Brothers' equities and investment banking business in Europe and Asia in 2008 at the height of the global financial crisis as part of a strategy to expand from its domestic stronghold.
Nomura's January-March net profit was 61.3 billion yen, compared with a net loss of 19.2 billion yen in the same period a year earlier.
Its overseas operations posted a quarterly pretax profit of 16.7 billion yen, against a loss of 16.6 billion yen in the year-earlier period. That helped Nomura post an annual profit of 88.1 billion yen overseas.
"The profitability of our Wholesale business improved substantially over the past year with all international regions profitable on a full-year basis," Nomura Group CEO Koji Nagai said in a statement.
Wall Street banks including Morgan Stanley and Citigroup Inc saw strong first-quarter profits on a bump in bond trading activity due to investors adjusting their portfolios in response to interest rate movements, elections in Europe and Britain's progress in leaving the European Union.
Pretax profit at Nomura's wholesale division, which counts corporations and institutional investors as clients, was 28.1 billion yen for the latest quarter compared with a loss of 22.8 billion yen a year earlier.
The unit's revenue was buoyed by brisk bond trading and clients' M&A deals that Nomura advised and financed.
Profit at Nomura's retail division, which serves mostly individual Japanese investors, more than doubled year-on-year for the latest quarter, as increases in sales of investment trusts and bonds offset weak demand for stocks amid a flat market and the thinnest equities trading activity since late 2015.
The retail arm, traditionally a driver of the brokerage's profit, has suffered since 2014 as investors have become reluctant to move cash to stocks in an uncertain economic outlook and volatile markets in Japan. Annual profit at the unit fell for its third straight year.
Nomura's net profit for the 12 months ended March rose 82.1 percent to 239.6 billion yen, compared with an average forecast of 236.33 billion yen of seven analysts surveyed by Thomson Reuters, its best annual performance since 2006.
($1 = 111.3400 yen)
(Reporting by Thomas Wilson; Editing by Muralikumar Anantharaman)
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