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Transcript of Investor Presentation 2007 - Nomura Investor Presentation 2007 Nobuyuki Koga President and CEO...

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    Investor Presentation 2007

    Nobuyuki Koga

    President and CEO Nomura Holdings, Inc.

    May 14, 2007

    Below is a summary of Nomura Holdings’ May 2007 investor presentation.

    Date: May 14, 2007 Place: 7th Floor, Nomura Securities Co., Ltd. Speaker: Nobuyuki Koga

    President and CEO Nomura Holdings, Inc.

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    1. This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2007 Nomura Holdings, Inc. All rights reserved. 2. Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or

    other instrument, including securities issued by Nomura or any affiliate thereof. Offers to sell, sales, solicitations to buy, or purchases of any securities issued by Nomura or any affiliate thereof may only be made or entered into pursuant to appropriate offering materials or a prospectus prepared and distributed according to the laws, regulations, rules and market practices of the jurisdictions in which such offers or sales may be made.

    3. No part of this document shall be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Nomura.

    4. The information and opinions contained in this document have been obtained from sources believed to be reliable, but no representations or warranty, express or implied, are made that such information is accurate or complete and no responsibility or liability can be accepted by Nomura for errors or omissions or for any losses arising from the use of this information.

    5. This document contains statements that may constitute, and from time to time our management may make "forward-looking statements" within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Any such statements must be read in the context of the offering materials pursuant to which any securities may be offered or sold in the United States. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. Important factors that could cause actual results to differ from those in specific forward-looking statements include, without limitation, economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, and the number and timing of transactions.

    6. The consolidated financial information in this document is unaudited.

    1. This document is produced by Nomura Holdings, Inc. ("Nomura"). Copyright 2007 Nomura Holdings, Inc. All rights reserved. 2. Nothing in this document shall be considered as an offer to sell or solicitation of an offer to buy any security, commodity or other instrument, including securities issued by Nomura or any affiliate thereof. Offers to sell, sales, solicitations to buy, or purchases of any securities issued by Nomura or any affiliate thereof may only be made or entered into pursuant to appropriate offering materials or a prospectus prepared and distributed according to the laws, regulations, rules and market practices of the jurisdictions in which such offers or sales may be made. 3. No part of this document shall be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of Nomura. 4. The information and opinions contained in this document have been obtained from sources believed to be reliable, but no representations or warranty, express or implied, are made that such information is accurate or complete and no responsibility or liability can be accepted by Nomura for errors or omissions or for any losses arising from the use of this information. 5. This document contains statements that may constitute, and from time to time our management may make "forward-looking statements" within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. Any such statements must be read in the context of the offering materials pursuant to which any securities may be offered or sold in the United States. These forward-looking statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. Important factors that could cause actual results to differ from those in specific forward-looking statements include, without limitation, economic and market conditions, political events and investor sentiments, liquidity of secondary markets, level and volatility of interest rates, currency exchange rates, security valuations, competitive conditions and size, and the number and timing of transactions. 6. The consolidated financial information in this document is unaudited.

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    15.5%

    5.2% 7.4%

    10.1% 8.3%

    -100

    0

    100

    200

    300

    400

    500

    FY2003.3 FY2004.3 FY2005.3 FY2006.3 FY2007.3 -5%

    0%

    5%

    10%

    15%

    20%

    25%

    Changes Since Apr. 2003 – Profitability

    Segment Income before Income Taxes and Consolidated ROE

    Achieve an average consolidated ROE of 10%-15% in the medium to long term

    Profitability improved significantly in past 4 years

    Our Goal

    Other Asset Management Global Merchant Banking Global Investment Banking Global Markets Domestic Retail

    ROE

    (billions of yen)

    Good afternoon ladies and gentlemen. Thank you for attending Nomura Holdings’ investor presentation.

    Today, I would like to outline the direction we will take going forward. In the four years since I became CEO, we have significantly transformed Nomura. First, I will take a few moments to speak about this transformation, before outlining what I see as our issues at hand and what we are doing to address these issues.

    As we announced on April 26, net income for the year ended March 31, 2007, was 175.8 billion yen, and ROE was 8.3%. Total income before income taxes from business segments for the year was 377.3 billion yen, up from 89.2 billion yen four years ago. As such, revenue has increased significantly over the past four years.

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    AM 4%

    Changes Since Apr. 2003 – Revenue Structure

    FY2003.3 Income before income taxes from all business segments

    89.2 billion yen

    GMB = Loss AM 3%

    FY2006.3 FY2007.3 Income before income taxes from all business segments

    377.3 billion yen

    Large Large profitprofit

    +7+73.33.3%%

    +36+36.6%.6%

    +45.7%+45.7%

    --111.01.0%% % CAGR

    FY2003.3-2007.3

    Shifted to revenue structure balanced across 5 divisions

    *DR = Domestic Retail GM = Global Markets GIB = Global Investment Banking

    AM 10%

    GMB 15%

    GIB 13%

    DR 45%

    GM 17%

    AM 10%

    GMB 15%

    GIB 13%

    DR 45%

    GM 17%

    Note: Pie charts based on income before income taxes of the five business segments

    GMB 11%

    GIB 11%

    DR 41%

    GM 33%

    GMB 11%

    GIB 11%

    DR 41%

    GM 33%

    GIB 9% DR

    24%

    GM 64%

    GIB 9% DR

    24%

    GM 64%

    GMB = Global Merchant Banking AM = Asset Management

    Looking at a breakdown of income before income taxes by segment, you can see that four years ago we relied heavily on Global Markets.

    Revenue is now much more balanced across all five business divisions. I believe we have made much progress over the past four years to build up a revenue base that allows us to achieve sustainable ROE of 10-15%.

    However, ROE in the prior fiscal year did not reach 10% for the full year, clearly pointing to issues that need to be resolved.

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    22 Develop new businessesDevelop new businesses

    33 Revamp international operationsRevamp international operations

    11 Strengthen domestic client base, increase revenue sourcesStrengthen domestic client base, increase revenue sources

    Next, I will outline the challenges I believe we face regarding the three issues for further growth I outlined at last year’s presentation, namely, strengthening our domestic client base and increasing our revenue sources, developing new businesses, and revamping our international operations.

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    GMB 11%

    GIB 11%

    DR 41%

    GM 33%

    GMB 11%

    GIB 11%

    DR 41%

    GM 33%

    AM 10%

    GMB 15%

    GIB 13%

    DR 45%

    GM 17%

    AM 10%

    GMB 15%

    GIB 13%

    DR 45%

    GM 17%

    22 Develop new businesses

    +7+73.33.3%%

    +45.7%+45.7%

    % CAGR FY2003.3-2007.3

    AM 4%GMB = Loss AM 3%

    11 Strengthen domestic client base, increase revenue sourcesStrengthen domestic client base, increase revenue sources

    33 Revamp international operations

    Note: Pie charts based on income before income taxes of the five business segments

    GIB 9% DR

    24%

    GM 64%

    GIB 9% DR

    24%

    GM 64%

    *DR = Domestic Retail GM = Global Markets GIB = Global Investment Banking

    GMB = Global Merchant Banking AM = Asset Management

    First, we have made signi