Nomura Holdings, Inc.

Nomura's business and earnings may be significantly affected by the state of the Japanese and global economies and by developments in financial markets (including geopolitical events). In 2025, the Bank of Japan's policy rate hikes caused 10-year JGB yields to rise by approximately 1% over the year, and in April 2026, following the collapse of peace talks between the United States and Iran, JGB yields reached their highest level in approximately 30 years, making market instability increasingly evident. While Nomura maintains daily risk measurement and limit management systems, prolonged market downturns or reduced liquidity could result in significant losses.

Nomura holds trading positions across a diverse range of assets, including bonds, equities, derivatives, and securitized products, and may incur significant losses due to large fluctuations in market prices or excessive strain on the financial system. In particular, holding large and concentrated positions (such as through market-making, underwriting, and securitization businesses) creates a risk of significant trading losses during periods of price volatility. Hedging strategies may also fail to function adequately in situations where historical correlations do not hold, and the limitations of risk management could be a factor exacerbating losses.

A decline in Nomura's creditworthiness or deterioration in market conditions could make it difficult to secure necessary funding, whether unsecured or secured, or could force Nomura to raise funds at significantly higher interest rates. Major factors that could impair funding capability include substantial trading losses, administrative sanctions by regulatory authorities, and credit rating downgrades. While Nomura works to secure liquidity through repo transactions, long-term bond issuance, and the establishment of a liquidity portfolio, asset sales could also become difficult during periods of overall market turmoil.

Nomura may incur significant losses if a counterparty to a loan, derivative, repo, or similar transaction defaults. In FY2024 (ended March 2024), Nomura recorded an allowance for credit losses of approximately ¥14.0 billion in connection with a settlement failure involving a UK subsidiary and a broker. There is also a risk that credit risk mitigation measures may not function adequately due to a sharp decline in collateral value or inaccuracies in a counterparty's financial information, as well as a risk that the failure of a major financial institution could have a cascading impact on Nomura.

Nomura is subject to a broad range of domestic and international regulations, including capital adequacy requirements, customer protection regulations, and market conduct rules, and may face administrative sanctions such as fines, business suspension, or revocation of operating licenses in the event of a regulatory violation. The Basel III final rules began to apply from the end of March 2025, and Nomura is also subject to TLAC regulations; deficiencies in anti-money laundering and counter-terrorist financing measures also present a risk of administrative sanctions. Increased costs associated with responding to tightening regulations, as well as the loss of business opportunities due to clients (particularly public institutions) distancing themselves from Nomura following sanctions, may adversely affect operating results.

Nomura's business is highly dependent on information systems and is at risk of being targeted by cyberattacks such as unauthorized access, computer viruses, and destructive software. The spread of remote work, the expansion of the crypto-asset business, and the growing use of AI (including generative AI) are expanding the attack surface, and inadequate management of AI could give rise to new risks of information leakage and social engineering. At Nomura Securities, unauthorized access to customer accounts through phishing scams and similar methods has occurred since January 2025, necessitating continued investment of management resources in strengthening security.

Fraudulent acts by officers and employees, such as unauthorized trading, concealment of losses, or insider trading, as well as involvement in fraudulent acts by third parties, could have a material adverse effect on Nomura's reputation and financial condition. While Nomura has implemented measures such as establishing the Nomura Group Code of Conduct, providing compliance training, and operating an internal reporting system, there is no guarantee that all fraudulent acts can be prevented or detected. In the event that administrative sanctions or court judgments are handed down, clients, including public institutions, may refrain from doing business with Nomura, and there is a risk of losing business opportunities for a certain period even after such sanctions are lifted.

In December 2025, Nomura acquired all equity interests in Macquarie Management Holdings, Inc. and other entities, recording ¥150,976 million in goodwill and ¥118,201 million in intangible assets on its consolidated balance sheet. A deterioration in the business environment or a failure to achieve the anticipated benefits of the acquisition could result in impairment losses on this goodwill and these intangible assets, potentially having a material impact on operating results and financial condition. There is also a risk that impairment recognition may become necessary if the share price of an equity-method affiliate declines significantly over a certain period.

The competitive environment is intensifying further due to consolidation and reorganization among financial institutions, the rise of fintech companies, and changes in services driven by the use of AI technology, which could reduce Nomura's market share and earnings. In its overseas business, Nomura is reviewing its business platform, including through the 2025 acquisition of Macquarie Group Limited's US and European public asset management businesses, but there is a risk that expected profits may not be realized due to cost overruns exceeding expectations or errors in strategic assumptions. Reductions in headcount and compensation associated with strategy execution could also adversely affect the ability to secure and retain talented personnel.

Competition for talent is intensifying due to factors such as compensation, working environment, training, and reputation as an employer, and if Nomura is unable to secure and develop appropriate personnel as planned, this could adversely affect its business and operations. There are also human resource and workplace environment risks, such as discrimination, harassment, and violations of local laws and regulations, and increased spending to secure talent could undermine profitability. Establishing corporate culture requires ongoing effort and may take longer than initially anticipated.