Daiwa profit climbs on strong global markets trading income

Daiwa Securities Group's profit surged in the latest quarter, surpassing analysts' predictions, primarily due to robust performance in global markets trading. Net income increased by 7.8% year-on-year to ¥51.43 billion ($326 million) for the three-month period ending September 30, according to the Tokyo-based company's announcement on Friday.

This figure exceeded the average estimate of ¥47.7 billion from Bloomberg's gathered analysts. The firm recorded significant gains in fixed income trading, which struggled for global banks due to rising interest rates, while equity trading remained robust. Daiwa and its rival, Nomura Holdings, are targeting stable income from Japanese households reallocating their savings into investments to safeguard their wealth against inflation.

Daiwa's Chief Financial Officer, Kotaro Yoshida, conveyed the company's strong performance during a briefing in Tokyo. Yoshida further noted that the global markets division started slower than the previous quarter. Equity trading revenue grew by approximately 9%, marking the sixth consecutive quarter of expansion. Fixed income revenue surged by 25%, investment banking, encompassing advice on mergers and acquisitions, increased by 9.1%, and wealth management revenue soared by 33%.

This year, Daiwa has undertaken various initiatives to expedite growth, including acquiring Orix's banking subsidiary in Japan to bolster its commercial lending operations. Daiwa's shares fell by 1% on Friday morning following the results, reducing this year's gain to 25%, outpacing Nomura's 14% increase. Nomura reported a 13% rise in profit for the quarter, attributing it to gains in wealth management and stock trading that compensated for a slight decline in fixed income revenue.