The Zhitong Finance App learned that Nomura (NMR.US) announced the goal of almost doubling pre-tax profits by the end of this century, and CEO Okuda Kentaro hopes to build on last year's profit recovery.

Speaking to investors on Tuesday, Okuda said that as part of its vision of “achieving sustainable growth,” Japan's largest brokerage firm plans to achieve a profit of over 500 billion yen (3.2 billion US dollars) before tax by 2030. He wants to increase the profitability of key wholesale divisions and limit the risk of volatility.

Thanks to the recovery in Japan's domestic financial market, Nomura achieved the first annual profit increase since Okuda took office in 2020. However, challenges remain due to the high costs of the wholesale business where its trading and investment banking business is located.

“We have positioned this year as an important year for better results,” Okuda said. At the same time, it is at times like these that we must launch new initiatives to lay the foundation for future revenue streams. We must not stand still.”

Okuda said that the wholesale department, led by Christopher Willcox, needs to maintain growth on a “self-funded” basis. In another report, Willcox outlined the goal of reducing the cost to revenue ratio from the current 94% to 80% by the end of March 2031. He said the department will increase the proportion of “low-risk, low-volatility businesses” such as wealth management.

Willcox said that the goal of international wealth management, which has experienced an “explosion” in the year, is to manage assets of more than 35 billion US dollars in the medium term and more than 60 billion US dollars in the long term. He said that in highly competitive fields such as UBS (UBS.US) and DBS Group, Nomura hopes to rank among the top 15 wealth management companies in Asia.

Nomura maintains the target of 288 billion yen in total profit before tax for the current fiscal year of the three major business divisions (including the recently renamed wealth management department and investment management division that serves domestic individual clients). The company also maintained its goal of increasing return on equity to 8% to 10% from 5.1% in the previous fiscal year.

Since this year, Nomura's stock price has risen 39%. This is mainly due to the rebound in the Japanese stock market, and investors are flocking to the stock market.

“The Japanese market has attracted a lot of attention, and this environment provides Nomura with a fantastic opportunity,” Okuda said.

Additionally, Nomura sees India and the Middle East as growth regions. In India, the company said it plans to invest in its onshore platform to deepen customer franchises across all of its lines of business, while in the Middle East, the company plans to focus revenue growth from the wholesale business on larger customers.

Okuda said the two markets have huge commercial potential, adding that the company has an opportunity to expand its wealth business in India.

Finally, Okuda also pointed out that Nomura will focus on mergers and acquisitions as an option to expand its customer base. The company will continue to expand from the open market to the private market, and that the company will repurchase shares while taking other measures to flexibly increase shareholder returns.