Daiwa Securities Group Inc.
8601・Prime Market・Securities & Commodity Futures
Wealth Management Division
Core division providing asset management and investment services to individuals and unlisted corporations
| Period | Current | Previous | Change |
|---|---|---|---|
| Net Operating Revenues | ¥295,788 million | ¥255,841 million | ↑ |
| Ordinary Income (Segment Profit) | ¥112,033 million | ¥80,664 million | ↑ |
| Depreciation and Amortization | ¥14,533 million | ¥15,565 million | ↓ |
Business Details
Serves primarily domestic individual investors and unlisted corporations, offering a broad range of financial products and services. Main revenue sources are fees from asset management-related products and services, and margin income earned from the deployment of deposits raised by Daiwa Next Bank. The division is driving expansion of balance-based revenue centered on Wrap Account Service (Fund Wrap), investment trusts, and foreign currency deposits, and is positioned as a key contributor to "base profit" under the group's medium-term management plan.
Recent Overview
Net operating revenues up 15.6% and ordinary income up 38.9% on higher equity revenue and sustained high level of wrap account contracts
In FY2026 (ending March 2026), equity-related revenue mainly increased due to more active market investment activity and deepening of total asset consulting. In addition, contract amounts and net increases in Wrap Account Service remained at high levels, resulting in net operating revenues of ¥295,788 million, up 15.6% year on year, and ordinary income of ¥112,033 million, up 38.9% year on year. As a subsequent event, the company decided that its wholly owned subsidiary Daiwa Next Bank would make ORIX Bank Corporation a wholly owned subsidiary (acquisition consideration of approximately ¥370 billion, expected to be completed by October 2026), which is expected to substantially strengthen lending and trust functions.
Key Products
Growth Drivers
- Expansion of investment trust and wrap account balances driven by the accelerating "shift from savings to investment" trend triggered by the introduction of the new NISA program
- Continued expansion of balance-based revenue through sustained high levels of Wrap Account Service contract amounts and net increases
- Growth in Daiwa Next Bank's deposit balance and increased margin income amid a rising interest rate environment
- Fundamental strengthening of lending and trust functions and deepening of total asset consulting capabilities through making ORIX Bank a wholly owned subsidiary
- Expansion of the customer base through comprehensive business alliances with Japan Post Bank, The Shikoku Bank, The Iwate Bank, and others
- Capturing affluent and corporate clients through expansion of the investment trust and other product lineup targeting alternative assets
Risks
- Impact on customers' investment activity from fluctuations in domestic and overseas financial markets and economic conditions (risk of reduced fee income during market downturns)
- Impact of changes in the interest rate environment on Daiwa Next Bank's margin income
- Intensifying competition for customer acquisition with rival securities firms, banks, and fintech companies
- Revenue volatility depending on the effectiveness of product development, underwriting conditions, and sales strategies tailored to customer needs
- Risk of market deterioration due to geopolitical risks (Russia-Ukraine situation, Middle East situation) and tariff policies under the Trump administration
- Integration risk associated with making ORIX Bank a subsidiary and uncertainty over whether the acquisition price (approximately ¥370 billion) will be matched by commensurate profit contribution
Asset Management Division
Diversified asset management division centered on investment trusts, real estate, and alternative investments
| Period | Current | Previous | Change |
|---|---|---|---|
| Net Operating Revenues (Full Year) | ¥111,930 million | ¥102,517 million | ↑ |
| Ordinary Income (Full Year) | ¥65,432 million | ¥77,418 million | ↓ |
| Net Operating Revenues YoY Change | +9.2% | — | ↑ |
| Ordinary Income YoY Change | -15.5% | — | ↓ |
| Depreciation and Amortization (Full Year) | ¥7,099 million | ¥6,804 million | ↑ |
| Goodwill Amortization (Full Year) | ¥1,037 million | — | — |
| Equity in Earnings of Affiliates (Full Year) | ¥12,234 million | — | — |
Business Details
The Asset Management Division comprises three sub-segments: Securities Asset Management (investment trust creation and management by Daiwa Asset Management), Real Estate Asset Management (REIT and private fund management by Daiwa Real Estate Asset Management and others), and Alternative Asset Management (private equity and infrastructure investment by Daiwa Corporate Investment, Daiwa PI Partners, and Daiwa Energy & Infrastructure). It provides asset management services across a broad range of asset classes to domestic and overseas individual and institutional investors.
Recent Overview
Revenue rose, but provisions and impairment losses in the alternative asset management business dragged ordinary income down 15.5% year on year
Full-year net operating revenues for FY2026 (ending March 2026) reached ¥111,930 million (+9.2% year on year), achieving revenue growth. Securities Asset Management saw higher revenue and profit, aided by net fund inflows into publicly offered investment trusts and rising equity markets. Real Estate Asset Management also saw higher revenue and profit due to the recording of property acquisition fees and gains on property sales. On the other hand, Alternative Asset Management recorded an ordinary loss due to provisions and impairment losses recognized following the revaluation of certain investees, and as a result, the division's overall ordinary income declined to ¥65,432 million (-15.5% year on year).
Key Products
Growth Drivers
- Growth in Daiwa Asset Management's publicly offered investment trust balance (continued inflows driven by the new NISA program)
- Increase in assets under management and recognition of acquisition fees and gains on sales through new property acquisitions and dispositions in Real Estate Asset Management
- Building an investment advisory business foundation through the capital and business alliance with Japan Post Insurance
- Expansion of the alternative product lineup (Blackstone infrastructure funds, etc.)
- Building up assets under management toward achieving the AM division's AUM targets under the group's medium-term management plan "Passion for the Best 2026"
- Contribution of equity in earnings of affiliates (¥12,234 million in the current period) from equity-method affiliates such as Sumitomo Mitsui DS Asset Management
Risks
- Risk of valuation declines at renewable energy and infrastructure-related investees (potential for additional provisions and impairment losses) — an ordinary loss was recorded again in the current period
- Decline in investment trust balances and reduced gains on sale of alternative investments due to weak equity and IPO markets
- Decline in Real Estate Asset Management revenue due to deteriorating supply-demand conditions and weaker rental demand in the domestic real estate market
- Slowdown in fund inflows into investment trusts amid a rising interest rate environment
- Impact on ordinary income from performance fluctuations at equity-method affiliates (Sumitomo Mitsui DS Asset Management, etc.)
Global Markets & Investment Banking Division
Wholesale division responsible for sales and trading for institutional investors and investment banking operations
| Period | Current | Previous | Change |
|---|---|---|---|
| Net Operating Revenues (Full Year, FY2026) | ¥257,395 million | ¥234,196 million | ↑ |
| Ordinary Income (Full Year, FY2026) | ¥58,995 million | ¥42,738 million | ↑ |
| Net Operating Revenues YoY Change (Full Year, FY2026) | +9.9% | — | ↑ |
| Ordinary Income YoY Change (Full Year, FY2026) | +38.0% | — | ↑ |
| Depreciation and Amortization (Full Year, FY2026) | ¥14,123 million | ¥14,101 million | — |
| Fees Received (Underwriting, Secondary Offerings, etc., Full Year, FY2026) | ¥39,939 million | ¥47,930 million | ↓ |
Business Details
Comprises two businesses: Global Markets (GM) and Global Investment Banking (GIB). GM conducts sales and trading of equities, bonds, foreign exchange, and derivatives for domestic and overseas institutional investors, corporations, financial institutions, and public sector entities. GIB provides underwriting and secondary offerings of securities as well as M&A advisory services. Revenue is mainly derived from client flow revenue, trading revenue, underwriting fees, and M&A fees, and performance is directly affected by market conditions, geopolitical risk, and changes in client flow.
Recent Overview
Ordinary income up 38.0% year on year on expanded equity flow revenue and increased M&A deal volume
In the full year of FY2026 (ending March 2026), within Global Markets, the equity business achieved higher revenue and profit as flow revenue expanded against the backdrop of a strong equity market. Within Global Investment Banking, the M&A business executed numerous deals both domestically and overseas, resulting in higher revenue and profit. As a result, net operating revenues reached ¥257,395 million (+9.9% year on year) and ordinary income reached ¥58,995 million (+38.0% year on year). On the other hand, underwriting and secondary offering fees decreased to ¥39,939 million from ¥47,930 million in the prior period.
Key Products
Growth Drivers
- Expansion of the M&A advisory business (numerous deals executed both domestically and overseas, contributing to higher revenue and profit for the full year of FY2026)
- Expansion of equity flow revenue against the backdrop of a strong equity market
- Winning underwriting mandates by capturing diverse client needs, such as sales of cross-shareholdings and pre-emptive debt financing amid a rising interest rate environment
- Data-science-driven marketing through enhanced collaboration with the Wealth Management Division
- Expansion of the business foundation through provision of diverse solutions beyond IPOs for unlisted companies
Risks
- Deterioration in market conditions and decline in client flow due to geopolitical risk and changes in the global economic situation
- Increased difficulty in managing fixed income positions amid rising interest rate volatility
- Decline in equity underwriting deals (underwriting and secondary offering fees down 16.7% year on year for the full year of FY2026)
- Decline in M&A demand due to deterioration in the domestic and overseas economic environment
- Decline in profitability due to intensifying competition with rivals for deal origination
Other (Daiwa Institute of Research Group, etc.)
Business segment providing group support functions such as research, IT, and consulting
| Period | Current | Previous | Change |
|---|---|---|---|
| Net Operating Revenues (External Customers) | ¥15,226 million | Not disclosed | — |
| Net Operating Revenues (Total, Including Inter-segment) | ¥37,580 million | ¥38,368 million | ↓ |
| Ordinary Loss (Segment Loss) | -¥2,919 million | ¥3,406 million | ↓ |
| Depreciation and Amortization | ¥14,597 million | ¥13,278 million | ↑ |
| Equity in Earnings of Affiliates | ¥5,358 million | ¥3,315 million | ↑ |
| Lease Revenue under Leasing Agreements | ¥5,823 million | Not disclosed | — |
Business Details
The "Other" segment is centered mainly on research and consulting operations and systems operations conducted by the Daiwa Institute of Research Group. It also includes subsidiary integration and management, information services, administrative agency services, and real estate leasing businesses. It is responsible for system development and operation across the Daiwa Securities Group as a whole, while also providing high-value-added solutions to external customers, supporting the group's revenue base. Net operating revenues from external customers for FY2026 (ending March 2026) were ¥15,226 million, with inter-segment net operating revenues of ¥22,353 million.
Recent Overview
FY2026 (ending March 2026) shifted to an ordinary loss of -¥2,919 million, a sharp deterioration from the prior period's profit
For the "Other" segment in FY2026 (ending March 2026), net operating revenues (total including inter-segment) decreased slightly to ¥37,580 million from ¥38,368 million in the prior period, while an ordinary loss of -¥2,919 million was recorded, a sharp deterioration from ordinary income of ¥3,406 million in the prior period. Depreciation and amortization increased year on year to ¥14,597 million, representing a heavy cost burden. Equity in earnings of affiliates increased to ¥5,358 million from ¥3,315 million in the prior period. As a subsequent event, it was announced that Daiwa Next Bank would make ORIX Bank Corporation a wholly owned subsidiary (acquisition consideration of approximately ¥370 billion, expected to be completed by October 2026), which will result in a fundamental expansion of banking functions.
Key Products
Growth Drivers
- Winning large-scale system development projects for major clients and expanding revenue from external customers by proposing high-value-added solutions through Daiwa Institute of Research
- Expansion of new solution areas leveraging generative AI and data science
- Revenue contribution from the HealthTech business, including rebuilding core systems for health insurance societies
- Growth in equity in earnings of affiliates from equity-method affiliates (¥5,358 million in FY2026, ending March 2026)
- Strengthening of banking functions and stabilization of the group's revenue base through Daiwa Next Bank's acquisition of ORIX Bank as a subsidiary
Risks
- Risk of shrinking demand for group-wide system investment due to deterioration in market conditions for the securities-related business
- Revenue instability due to fluctuations in orders for large-scale system development projects for major clients
- Pressure on profitability from a heavy cost structure due to the depreciation and amortization burden (¥14,597 million)
- Volatility in equity-method gains/losses due to performance fluctuations at equity-method affiliates
- Financial burden and integration risk associated with making ORIX Bank a subsidiary (acquisition consideration of approximately ¥370 billion)
- Risk of delayed improvement in the revenue structure if segment losses continue
Last updated: July 17, 2026