During the last quarter, Daiwa Securities Group, Japan's second largest brokerage and investment bank, experienced a remarkable 131% increase in quarterly net profit compared to the previous year. This surge was primarily driven by exceptional performances in its asset management, wholesale, and retail divisions.
Daiwa has strategically shifted its focus away from traditional brokerage commissions towards wealth management services, resulting in a more stable income stream. Notably, the retail division achieved its highest profit in eight years, indicating the success of this strategic shift.
The wholesale business witnessed increased customer activity from both domestic and overseas markets, particularly in equity trading. Additionally, the global investment banking M&A business, a part of the wholesale division, recorded its highest-ever revenue of 43.5 billion yen. However, increased M&A headcount in Europe led to a small loss in this segment.
To strengthen its M&A business further, Daiwa has been actively hiring investment bankers and aims for a 50% growth in this segment over approximately eight years. In the fiscal year ending March 2024, Daiwa ranked fifth among Japanese firms in terms of the number of M&A deals completed.
Regarding the yen's recent depreciation to a 34-year low against the dollar, Daiwa's chief financial officer Kotaro Yoshida highlighted both positive and negative impacts on the Japanese economy. He noted changes in domestic consumer behavior due to the weak yen and inflation, observing a shift from prioritizing cash to considering portfolio investments.
Daiwa's consolidated net profit for the January-March period reached 39.5 billion yen ($253.76 million).
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