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Nomura in the black for second straight quarter

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Nomura Holdings Inc. stayed in the black for a second straight quarter, helped by a recovery in financial markets and the broadening of its business overseas through the acquisition of parts of Lehman Brothers.

Profit for the July-September period totaled 27.72 billion yen ($304.6 million) compared with a 72.87 billion yen loss a year earlier, Japan’s biggest brokerage said Wednesday. Quarterly sales rose 37.9 percent to 355.47 billion yen ($3.9 billion) from 257.73 billion yen.

Nomura said it generated more revenue from overseas than inside Japan for the first time during the latest quarter, underlining emerging success in pursuing its global ambitions. It was able to create stable income from its strong client base in Japan as well as new businesses acquired abroad, it said.

Nomura acquired Lehman’s equities business in Asia and Europe last year after the American investment bank collapsed. The costs of buying those businesses contributed to Nomura’s record loss the previous fiscal year. Nomura returned to profit in the April-June quarter of this year.

Neil Katkov, head of Asia Research at global financial consultancy Celent in Tokyo, said the results highlight Nomura’s recent efforts to build its international presence. He said other Japanese financials, such as Bank of Tokyo-Mitsubishi, are following suit.

“The Lehman acquisition, initially seen as a potential pitfall, has instantly made them a leading player in Europe and Asia. They are not stopping there, but continue to enter new markets throughout Europe, the US and Asia,” Katkov said.

“We are seeing the first truly serious efforts by Japanese financial companies to build international business,” he said.

Such moves among Japanese insurers and banks are critical because opportunities to grow are shrinking in the Japanese market, said Katkov.

“The acquisitions have been a resounding success,” said Nomura President and Chief Executive Kenichi Watanabe. “The results are another solid step in our drive to become a truly global investment bank.”

Nomura does not give profit forecasts. Nomura shares gained 0.3 percent to 643 yen ($7) in Tokyo.

© 2009 Associated Press. Displayed by permission. All rights reserved.

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