Connecting Markets East & West

© Nomura © Nomura September 22, 2015

Case Study: Nomura’s Strategies on Globalization and

Transformation

Takuya Furuya

Senior Managing Director

President & CEO

Nomura Financial Investment (Korea) Co., Ltd.

Consolidation in Banking Industry and Brokerage Houses

Yamaichi

Daiwa Nikko

Nomura

New Japan

Kokusai Wako Kankaku

Sanyo Okasan Cosmo

Others

Mitsubishi

Tokyo

Tokai

Sakura

Sumitomo Sanwa

Dai-Ichi Kangyo

IBJ

Fuji

LTCB

Daiwa Asahi

Yamaichi

New Japan

Kokusai Wako Kankaku

Sanyo

Others

Mitsubishi

Tokyo

Tokai

Sakura

Sumitomo Sanwa

Dai-Ichi Kangyo

IBJ

Fuji

Daiwa Asahi

Sumitomo Mitsui

SMBC Nikko

Resona

Mitsubishi UFJ

Nomura

Daiwa

Mizuho

Shinko

Okasan Iwai Cosmo

Bankruptcy

Bankruptcy

1995 Current (2015)

Ban

kin

g

Secto

r

Secu

rities

Secto

r

Shinsei

Dissolved after

Alliance

Source: NICMR 1

Year Event

1997 Establishment of Nomura Asset Management Co., Ltd.: Merger of Nomura

Securities Investment Trust and Nomura Investment Management (In 2001,

Nomura Asset Management became a wholly-owned subsidiary of Nomura

Holdings)

1998 “New Business Plan”: Introduction of Matrix Management Structure

2001 Establishment of Nomura Holdings, Inc.: Introduction of Holding Company

Structure

Listing Nomura’s American Depository Receipt (ADR) on the New York Stock

Exchange

2003 Adopting “Committee System” on Nomura’s Board of Directors Structure

2007 Instinet (execution services provider) became a subsidiary of Nomura

Holdings Inc.

2008 Acquisition of Lehman Brothers' Asia-Pacific franchise and certain operations

in Europe and the Middle East.

Acquisition of Lehman Brothers' service platform in India.

Nomura’s Corporate Structure and Group Management: Historical Overview

Changes in Corporate Structure in the Last Decade

2 Source: NICMR

3

Overview of Nomura’s Strategic Moves (Concept)

Matrix

Management

Transforming

Business Models

(in Domestic

Market) “Double Wheels”

Business Models

Change in

Corporate/Group

Structure

Focus/

Capital Market

Oriented

Source: NICMR (Nomura Institute of Capital Markets Research)

Globalization

Client First

Going Overseas

Company Philosophy Basic Strategies

During the Last Decade

Strategic Moves

Financial Crises (Japan, Asia, Russia, Subprime, etc.)

Regulatory Reform (Domestic, Overseas, Global)

Competitive Environment

Compliance Issues

Roles of Securities Firms in Financial Services Industry

Advices and Values Provided by Securities Firms: More Diversified and More Technically Demanding

4

Major Business Types Significances

• Broker (Agent)

• Dealer (Principal)

• Underwriter

• Offering/ Selling

• Capital formation/raising

• Providing investment opportunities

• Intermediaries of public securities market

Major Business Lines Significances

• Retail (Distribution/Wealth Management)

• Asset Management

• Wholesale

Global Markets (Equity/Fixed Income/

Derivatives)

Investment Banking

• Others (Banking, Trust etc.)

• Financial planning/consulting

• Financial product manufacturing

• Advisory/Providing solutions

• Providing risk capital to economy

Source: NICMR

5

Historical Transition of Retail Investment Service in Japan

Brokerage of Individual

Equities

Fixed Commission System

Brokerage

Commissions

Foreign Currency-

denominated Bonds

Deregulation of Equity

Trading Commissions

Up-front

Commissions

High Growth Economy and

Inflation

Low Growth Economy and

Low Interest Rates

Mutual Funds

(Investment Trusts)

Separately Managed

Account (SMA)

Aging Clients

Inheritance

Asset Management Fees,

Wrap Account Fees

(Asset-based and Recurring)

Advising for Clients’ Inheritance

or Life Events

Maximizing Client Assets (AUM)

Mutual Fund Wrap

Bac

kg

rou

nd

C

ore

Pro

du

cts

/Se

rvic

es

R

eve

nu

e

So

urc

e

Large-scale IPOs

Acquiring Profitable

Clients

Maximizing Sales

Commissions

Increase of Number of

Customers

Maximizing Brokerages

Commissions

Ma

na

ge

me

nt

Go

als

Source: NICMR

Nomura’s Retail Division: Client Assets

Transformation of Retail Brokerage Business

Historically it has been told Nomura’s Retail segment is good at distributing financial products.

Currently the number of retail accounts surpassed approx. 5.2 million, representing almost 25% of all Japanese

securities accounts, which provides various business opportunities.

With its over JPY 100 trillion AUM, Nomura is by far the largest securities company in Japan.

6 Source: Financial Results of Nomura Holdings

Nomura’s Retail Division: Accounts with Balance

Nomura’s Retail Division: Changes in Major Revenue Accounts

Transformation of Retail Brokerage Business

Create synergies between wholesale(manufacturing of investment products) and retail(distribution) businesses

At the same time, enhance consulting sales, wealth management, DC/employer related businesses for expanding

investor base

7 Source: Financial Results of Nomura Holdings

0

20

40

60

80

100

120

140

160

180

FY2006/07 FY2007/08 FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 FY2013/14 FY2014/15

Stock Brokerage Commissions Commissions for Distribution of Investment Trusts

Billions of Yen

Nomura’s Net Revenues (Revenue after Financial Charge Deduction): Overseas vs. Domestic

Efforts for Globalization

Developing Relatively Niche and Innovative Businesses: CMBS, Securitization, Private Equity, High Yield Debt

(Investment Management), etc.

Acquiring Europe and Asia Operation of Lehman Brothers

Aiming to become “Asia’s Global Investment Bank”

8 Source: Financial Results of Nomura Holdings

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Net Revenue (Overseas)/ Net Revenue (Consolidated)

(Linear Approximation)

Global Markets: Growth of client

1. Source: 2008 – 2014 Greenwich Associates Fixed-Income Studies for North America, Asia and Europe. Japan figures are for 2008 - 2013 yen products.

2. Japan: Tokyo Stock Exchange; US: New York Stock Exchange, NASDAQ others; UK: London Stock Exchange; Hong Kong: Hong Kong Stock Exchange.

Client business growth driven by expansion of business platform

15

2008 2014 1

Fixed Income

Clients who rank

Nomura as a meaningful

counterparty1

Equities

Market share on major

stock exchanges2

11%

4%

6%

3%

2008 Jan-Jun, 2014

Japan US UK HK Japan US UK HK

7%

3%

1% 1%

86%

1% 2% 5%

Japan Americas EMEA AEJ

95%

35% 30% 24%

Japan Americas EMEA AEJ

Investment Banking: Stronger international franchise

1. Source: Nomura, based on data from Thomson Reuters; Deals in which Nomura was involved as Co-Manager or higher role .

2. Source: Nomura, based on data from Bloomberg.

3. Source: Nomura, based on data from Thomson Reuters; Percentage on transaction value basis of M&A deals not involving Japanese companies in which Nomura played a role.

Marked improvement in international service and product capabilities Jump in international revenues

100

393

International Investment Banking revenues

(Rebased, pre-integration=100)

16

1,080 782

ECM ALF

5,598

4,326

ECM ALF1 2

2007 – 2008 (annual average) 2010 – 2013 (annual average)

1 2

2006 – 2008 (annual average) 2010 – 2013 (annual average)

10% 55%

(millions of USD)

International

ECM/ALF

mandates

Non-Japan

M&A

mandates3

#40 #14

Global league table Pre-integration

FY03/04 –

FY07/08

Post integration

FY09/10 –

FY13/14

Wholesale revenues and expenses rose sharply after integration

Wholesale revenues and expenses

1. Five year annual average.

2. Exchange rate is six month average of month-end spot rate. FY2011/12 : 1H=Y79.16, 2H=Y78.48; F2012/13: 1H=Y78.87, 2H=Y87.66; FY2013/14: 1H=Y98.58, 2H=Y102.18. 17

(200)

0

200

400

600

800

1,000

収益

費用

FY03/04 FY04/05 FY05/06 FY06/07 FY07/08 FY08/09 FY09/10 FY10/11 FY11/12 FY12/13 FY13/14

(billions

of yen)

Pre-integration

(FY2003/04 – FY2007/08)

Post integration

(FY2009/10 – FY2013/14)

Net

revenue1 1.8x

$2,799

$3,789

$3,892

$3,189

2,000

3,000

4,000

5,000

収益(米ドル)

費用(米ドル)

FY2011/12 FY2012/13 FY2013/14

1H 2H 1H 2H 1H 2H

Revenues and expenses on USD basis2

(millions of USD)

Aligned costs to environment: “Fit for the Future”

Net

revenue

+35% Y385.6bn Y676.1bn

Int’l

27% Int’l

66%

Net revenue

Expenses

Net revenue

Expenses

Expenses

-18%

Through “Fit for the Future” exercise, a quality of human resource has made an improvement.

The exercise has also contributed to cementing a team spirit across business divisions and boarders.

12 Source: Nomura

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Jun-16

Japan

Asia&Oceania

US

EMEA

+2,632

(+19%)

+8,630

(211%)

Japan : Overseas

77:23

Japan : Overseas

57:43

Human Resource – Driver of our business

Lehman integration was a stepping stone for Nomura’s globalization.

Higher profile in the industry thanks to the integration has made it possible for Nomura to attract talents across

the regions and countries.

While we appreciate a diversity of our staffs, we’re trying to achieve sharing the same level of understanding in

Nomura founding principles and corporate ethics.

Retail

AM

WS

Other WS

Non-WS

WS

Non-WS

WS

Non-WS

Leveraging global platform to diversify revenues

1. Excluding Nomura Real Estate Holdings

FY2005/06 – FY2007/08 FY2012/13 – FY2014/15 FY2019/20 (rough estimate)

Firm-wide annual revenues (average)

Japan equities business

Foreign bonds and niche products for

Japanese institutional investors

Approx.16% Approx.30% Approx.40% International revenues

Approx.Y1trn Approx.Y1.5trn1 Y1.8 – Y1.9trn

Products and services for global clients

Increase in cross-border deals

Further develop client businesses

Expand non-Wholesale international

businesses

Loss Break-even Approx. 25% of firm-wide

pretax income

International

contribution

Americas

Japan

AEJ

EMEA

EMEA

Japan

AEJ

Firm-wide annual revenues (average)

International revenues

Firm-wide annual revenues

International revenues

Americas

International

contribution International

contribution

Japan

International

Japan

Americas

EMEA

AEJ

The foundation has been built.

Listening well to and working hard with our clients on the highest level of corporate ethics sharing our founding

principles should enable us to achieve the goal.

Disclaimer

This document is produced by Nomura Holdings, Inc. (“Nomura”). Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other

instrument, including securities issued by Nomura or any affiliate thereof. Offers to sell, sales, solicitations to buy, or purchases of any

securities issued by Nomura or any affiliate thereof may only be made or entered into pursuant to appropriate offering materials or a

prospectus prepared and distributed according to the laws, regulations, rules and market practices of the jurisdictions in which such

offers or sales may be made.

The information and opinions contained in this document have been obtained from sources believed to be reliable, but no

representations or warranty, express or implied, are made that such information is accurate or complete and no responsibility or

liability can be accepted by Nomura for errors or omissions or for any losses arising from the use of this information.

All rights regarding this document are reserved by Nomura unless otherwise indicated. No part of this document shall be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,

without the prior written permission of Nomura.

This document contains statements that may constitute, and from time to time our management may make “forward-looking

statements” within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Any such

statements must be read in the context of the offering materials pursuant to which any securities may be offered or sold in the United

States. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of

which, by their nature, are inherently uncertain and outside our control. Actual results and financial condition may differ, possibly

materially, from what is indicated in those forward-looking statements. You should not place undue reliance on any forward-looking

statement and should consider all of the following uncertainties and risk factors, as well as those more fully discussed under Nomura’s most recent Annual Report on Form 20-F and other reports filed with the U.S. Securities and Exchange Commission (“SEC”) that are

available on Nomura’s website (http://www.nomura.com) and on the SEC‘s website (http://www.sec.gov); Important risk factors that

could cause actual results to differ from those in specific forward-looking statements include, without limitation, economic and market

conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency

exchange rates, security valuations, competitive conditions and size, and the number and timing of transactions.

Forward-looking statements speak only as of the date they are made, and Nomura undertakes no obligation to update any forward-

looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

The consolidated financial information in this document is unaudited.