DAIWA Securities Group, Japan’s second largest brokerage and investment bank, reported on Thursday (Apr 25) a 131 per cent year-on-year jump in quarterly net profit, helped by a record strong results in its asset management, wholesale and retail divisions.

Daiwa has sought to shift its focus away from generating commissions in its traditional brokerage business to focus instead on its wealth management services, which generate more stable income. This quarter saw the highest profit in Daiwa’s retail division in eight years.

Its wholesale business saw increased customer flows from overseas and domestic equity while the global investment banking M&A business, which falls under the wholesale division, generated record revenue of 43.5 billion yen. However the global investment banking segment made a small loss due the cost of increasing M&A headcount in Europe.

Daiwa has been beefing up its M&A business by increasing its hiring of investment bankers and has said it aims to grow the segment by 50 per cent over around eight years.

In the year to March 2024 Daiwa ranked fifth among Japanese firms in terms of the number of M&A deals, according to LSEG data.

In response to the yen’s fall to a 34-year low against the US dollar on Thursday, Daiwa’s chief financial officer Kotaro Yoshida told a press briefing that it had both positive and negative effects on the Japanese economy. The weak yen and inflation had changed domestic consumer behaviour, he said.

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“It used the be that cash is king, but we now have more enquiries where customers have to think about their portfolios,” he said.

January-March consolidated net profit was 39.5 billion yen (S$349.7 million). REUTERS