Industry Report Card: Performance Of Japan's Three Major Securities Groups Remains Weak, Especially In The Wholesale Segment Aug 11

Standard & Poors, August 2011

Abstract
All three major securities groups rated by Standard & Poor's Ratings Services saw their net operating revenues increase in the first quarter of fiscal 2011 (April 1, 2011 to June 30, 2011) from the previous quarter. Profits rose at Nomura Holdings Inc. (BBB+/Stable/A-2) and SMBC Nikko Securities Inc. (A+/Stable/A-1). However, Nomura's profits would have decreased if one-off factors were excluded, and SMBC Nikko's profits were low, compared to levels seen in the previous quarters. Meanwhile, Daiwa Securities Group Inc. (BBB/Negative/A-2) posted net losses for the second consecutive quarter. Overall, the securities groups' investment banking businesses performed poorly. Weak corporate demand for funds and a sluggish securities market in Japan dragged down their underwriting businesses. At the same time, profit-making opportunities...

Companies mentioned in this report are: Daiwa Securities Group Inc.,Nomura Securities Co. Ltd.,Daiwa Securities Capital Markets Co. Ltd.,Daiwa Securities Co. Ltd.,Nomura Holdings Inc.,SMBC Nikko Securities Inc.

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Daiwa Securities Group Inc.,Nomura Securities Co. Ltd.,Daiwa Securities Capital Markets Co. Ltd.,Daiwa Securities Co. Ltd.,Nomura Holdings Inc.,SMBC Nikko Securities Inc.

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