Fitch keeps Nomura view stable

Fitch Ratings said in a new report that the outlook for Japanese securities companies, including Nomura Holdings Inc., is stable, based on their adequate capitalization, current risk-averse financial management and restructuring efforts.

Nomura is rated BBB. Nomura Securities Co., Ltd. is rated BBB+.

The agency said regulatory capital at Nomura is adequate in terms of quality and quantity to withstand market challenges. On the other hand, overhead costs have been a burden. Fitch said that given limited revenue opportunities, a focus on cost reduction in the core business in Japan and Asia should improve profitability and enhance resilience against downside risks.

Japan's economy should resume recovery next year after the natural disaster in March 2011 halted the improving trend seen since late 2009, the agency predicted. However, it said the recovery may not be strong enough to materially increase the profit of the securities firms.

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