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Nomura aims to nearly double profit over 7 years with focus on wealth management

FILE PHOTO: Logo of Nomura Securities is pictured at the company's Otemachi Head Office in Tokyo

(This May 14 story has been refiled to clarify that hiring of more than 70 private bankers was as of October 2023 in paragraph 6, and to amend reference to ROE in paragraph 9)

By Anton Bridge and Miho Uranaka

TOKYO (Reuters) - Nomura Holdings, Japan's biggest brokerage and investment bank, said on Tuesday it aims to nearly double its pre-tax profit over seven years as it pushes deeper into wealth management.

Like many other financial firms, Nomura has been trying to bolster wealth management, which accounted for roughly half of its pretax income in the past financial year. The business is seen as more stable than trading which is closely tied to the ups and downs of markets.

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It told an investor relations event that is targeting pre-tax profit of more than 500 billion yen ($3.2 billion) by the 2030/31 financial year, around 1.8 times what it had in the year ended in March.

In Japan, Nomura is the dominant wealth manager with a strong client base among high net wealth individuals and is targeting further expansion among business owners, startup managers and doctors.

But it has had less success abroad, remaining outside the top 25 in the latest ranking of Asia wealth businesses by Asia Private Banker.

Nomura has built out a dedicated team to tap into Asian markets, hiring more than 70 private bankers in the three years to October 2023. It has also said it wants to become one of the top 15 wealth managers in Asia over the long term and sees India and the Middle East as promising markets for growth.

For its more capital intensive wholesale business, which includes investment banking and trading, Nomura is hoping to generate organic growth rather than bring in capital from other parts of the group, Group CEO Kentaro Okuda said.

This is intended to incentivise the wholesale unit to pursue higher return on equity (ROE) business lines, Nomura's head of wholesale, Christopher Willcox, added.

Across the group Nomura had ROE of 5.1% in the last business year. But Okuda said management was confident its ROE target of 8%-10% was within reach next year.

($1 = 156.2500 yen)

(Reporting by Anton Bridge, Miho Uranaka and Yu Xie; Editing by Gerry Doyle and Edwina Gibbs)