Japan insurance, brokerage, and other nonbanks: Insurance, brokerage, and other nonbanks valuation update, 31 July 2026

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Japan insurance, brokerage, and other nonbanks

Insurance, brokerage, and other nonbanks

valuation update, 31 July 2026

Industry Overview

Nomura's exceptionally strong 1Q earnings should provide

meaningful support for the interim dividend

Nomura reported a 1Q ROE of 15% on 29 July, well above the 11% ROE used in our

valuation and PO. While favorable equity market clearly provided a tailwind, we estimate

that an interim DPS of around ¥34 would still be achievable even if 2Q net profit falls to

slightly below ¥100bn, compared with ¥145.6bn in 1Q, assuming a 40% payout ratio.

This provides a high degree of confidence regarding the interim dividend outlook. Daiwa

is scheduled to report 1Q results on 3 August. As shown in Exhibit 51, Nomura currently

appears likely to offer the more attractive interim dividend yield.

JPX: focus shifts to whether trading val. can be sustained

The trading value data disclosed by JPX include both auction and off-auction

transactions and differ from the auction-market-only figures shown in Exhibit 38. The

exhibit illustrates the large impact that Kioxia trading has had. Disclosure of large block

trades suggests that Kioxia's share of off-auction trading is also similarly high. If Kioxia

trading activity normalizes, investors will likely rotate their attention to other stocks or

sectors. However, it is unrealistic to assume that all of the trading value currently

concentrated in Kioxia will be fully redistributed elsewhere in the market.

SBI results positive, but earnings visibility remains limited

Multiple unlisted portfolio investments generated valuation gains in 1Q, benefiting from

the recovery in US private equity financing activity seen so far in 2026. Management

noted possibility of further valuation gains this year, and is a positive. In addition, the

sharp increase in trading gains at SBI Securities demonstrates the group's ability to

monetize favorable market conditions. We also view positively the success in directing a

greater proportion of order flow to the group's PTS, which helped limit rise in

transaction-expenses amid higher trading activity.

Impact of the Kumamoto earthquake likely limited

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