The profitability of five major Japanese securities companies will subside following a solid fiscal year ended March, with earnings coming down from recent peaks, Fitch Ratings said Sunday.
Easing investor sentiment amid rising external volatility and macroeconomic challenges will drive moderation in earnings, Fitch said.
The companies saw strong revenue and profit in the fiscal year, with net operating revenue growing by an average of 10%, the rating agency said.
The firms aim to boost revenue stability by honing in on asset and wealth management and client-centered business models, while improving risk controls amid operating uncertainties, Fitch said.
Nomura Holdings (TYO:8604) and Daiwa Securities Group (TYO:8601) will retain their strong capital buffers, while overall sector leverage should remain generally stable and liquidity a strong point, according to Fitch.
The sector's outlook remains neutral amid strong trading volumes, heightened market volatility, and the normalization of yen interest rates, Fitch said.