In This Article:
Release Date: January 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Daiwa Securities Group Inc (DSECF) reported a 0.3% increase in net operating revenues for Q3, indicating growth in their financial performance.
-
The wealth management division showed a real increase in both revenue and profit, driven by increased sales of equity investment trusts and wrap account service contracts.
-
The asset management division achieved a record profit, with gains in real estate and alternative asset management.
-
Global markets and investment banking divisions saw significant profit increases, particularly in the ECM business and domestic M&A.
-
Overseas operations reported a 72.6% increase in ordinary income, with strong performance in Europe, Asia, and Oceania.
Negative Points
-
Ordinary income decreased by 13.5% compared to the previous quarter, excluding certain gains.
-
Profit attributable to owners of the parent company decreased by 13.3%.
-
SG&A expenses increased by 4.2%, driven by higher personnel expenses and trading-related costs.
-
Daiwa Next Bank's ordinary income declined by 22.5% due to factors like spread compression.
-
Real estate asset management saw a 21.3% decrease in net operating revenues.
Q & A Highlights
Q: Can you elaborate on the performance of the wealth management division in Q3 2024? A: The wealth management division saw net operating revenues of JPY66 billion, up 8.9%, and ordinary profit of JPY21 billion, up 32%. This was driven by increased client investment activities, particularly in Japanese and foreign equities, and a rise in underwriting deals. The division also benefited from increased distribution commissions for investment trusts and high asset-based revenues, which accounted for 49.3% of the division's net operating revenues. (Respondent: Unidentified_1)
Q: How did the global markets and investment banking division perform? A: The global markets division reported net revenues of JPY40.3 billion, up 10.8%, with ordinary income rising 37.1% to JPY9 billion. Equity revenue increased, supported by foreign equities and sales related to the unwinding of cross-shareholdings. The investment banking division saw net revenues of JPY25.3 billion, up 33.1%, and ordinary income of JPY5.5 billion, up 383.6%, driven by strong underwriting and M&A activities. (Respondent: Unidentified_1)
Q: What were the key drivers behind the asset management division's performance? A: The asset management division achieved net operating revenues of JPY15.1 billion, up 5.9%, although ordinary income slightly decreased by 1.3% to JPY7 billion. The division secured a net capital inflow of JPY190.3 billion from publicly offered investment trusts, marking a record high in publicly offered securities investment trust assets. (Respondent: Unidentified_1)