Masafumi Nakada - CFO

Thank you. Good evening, ladies and gentlemen.

Thank you for taking time out to join Nomura Holdings telephone conference call to review our financial results for the fiscal year ended March 2008. I am Masafumi Nakada, CFO of Nomura Holdings Inc.

Let me start with page four of the presentation material. As announced in March, we introduced a new top management line-up on April 1st.

We have made a fresh start with a focus on creating change, aiming for world-class competitiveness and acting with speed. For the fourth quarter, in response to the worst business environment due to the turmoil in the global credit market, top management has become directly engaged in the risk management issues.

We have moved decisively to limit the future losses on the credit-related products. Please turn to page five.

As a result of this, we booked a significant loss in the fourth quarter. For the full year ended March 31st, 2008, we posted income before income taxes of minus 64.6 billion yen and net income of minus 67.8 billion yen.

The main causes over the business losses in the fourth quarter include increased credit provisions of around 132 billion yen for exposure to monoline insurers and an unrealized loss of about 22 billion yen in the U.S. CMBS-related business.

On the other hand, Domestic Retail, Global Merchant Banking and Asset Management booked their third straight year over strong revenue and delivered stable profits during a very tough fourth quarter. Although, we recorded a loss for the full year, we have shareholders' equity of about 2 trillion yen, and the loss will have only a very limited impact on our solid financial base.

That said, the current environment remains uncertain. We are moving to respond quickly and precisely to the declining business environment by cutting back the size of our balance sheet through reducing overseas repo transactions, exiting the U.S.

RMBS-related business, and reducing our U.S. CMBS-related positions.

We also announced today a fourth quarter dividend of 8.5 yen per share. That brings the total dividend for the full year to 34 yen per share.

Our target dividend for the fiscal year ending March 31st, 2009 will be 34 yen per share, in line with our dividend policy. Please turn to the next page.

This page shows consolidated financial highlights for the fiscal year ended March 31st, 2008. Net revenue for the full year was 787.3 billion yen.

Income before income taxes was minus 64.6 billion yen. Net income was minus 67.8 billion yen.

ROE for the full year was minus 3.3%. For the fourth quarter, net revenue was 21.5 billion yen.

Income before income taxes was minus 198.3 billion yen. And the net income was minus 153.9 billion yen.

Next, I will provide you with the details of our transactions with monoline insurers. Please turn to page five.

This page shows our gross exposure to monoline insurers in our structured credit trading business, part of Global Markets. These exposures are managed in Europe.

The chart also shows counter-party risk results, our net exposure, and the CDS or credit default swap protection. As of the end of March this year, our gross exposure to monoline rated A or higher was $1.1 billion.

Counter-party risk reserves and other adjustments increased by $100 million to $200 million. Net exposure was $900 million.

For other monolines, we have reserved our exposure in full. So any further changes to this exposure will not affect earnings.

Please turn to this next page where I will explain how we have dealt with changes in the transaction with monoline insurers. This page provides an outline of our exposure to… and the provisions for monoline insurers rated A or higher from December.

As shown here on the left, our growth exposure to monoline rated A or higher was $795 million at the end of the third quarter. We had made $94 million in provisions after taking into account the creditworthiness of monolines we deal with.

As shown in the middle of the page, the deterioration during the fourth quarter in the credit risk of underlying assets for credit derivates led to an increase in the credit spread. This meant that the growth exposure… the insurance we were entitled to receive from monoline increased more than expected.

If there were no concerns over the creditworthiness of monolines, there will be no impact on our earnings. However, we made increased credit provisions due to the growing concerns over the financial situation of monoline insurers.

We reserved our exposure to one certain monoline in full as we felt there was a significant chance that it would not be able to pay out should credit event occur. In addition, we have made certain arrangements on dispositions to eliminate any impact on our earnings in the future due to changes in the gross exposure.

As a result, our net exposure to monolines rated A to AAA was $900 million at the end of March, shown here on the right. To prepare for any future losses, we have $600 million worth of CDS.

We are also keeping a close watch on the financial position of each monoline insurer and are moving to limit any impact from increased exposure. Please turn to page ten.

During the fourth quarter, we disposed off our remaining slight exposure in the US RMBS-related business. As of the end of March, our exposure had been reduced to zero.

We have also been continuing to reduce our exposure to the US CMBS-related business. As of the end of March, our exposure was 131 billion yen, and we booked an unrealized loss in the fourth quarter of 22 billion yen.

Although we had hedged our US CMBS-related exposure mostly with the CMBX indices, the severe dry-up in liquidity in the markets led to transactions being conducted at major discounts out of line with fundamentals. We have valued our exposures as conservatively as possible according to the accounting rules using various pricing methods including prices from the most recent trades as reference.

Please turn to page 11. As I said, we have acted quickly to reduce our balance sheet in response to the rapidly changing market environment.

At the same time, we believe that as the world's major financial institutions try to navigate the prevailing headwind, we have been presented with the perfect opportunity to close the gap with our global competitors. In March, we issued subordinated bonds worth 120 billion yen and in April we have been in discussions with several leading Japanese financial institutions to borrow subordinated loans.

When added to the subordinated bonds, we are looking at raising a total of around 300 billion yen. By raising these subordinated funds, we are revising our capital structure away from the over-reliance on the shareholders’ equity.

We are acting with the speed to pave the way for proactive investments aimed at future growth. Please turn to page 12.

Looking at the business segments, Domestic Retail saw a net inflow of assets into Domestic Client Assets and a continued increase in customer accounts. Asset Management enjoyed its third straight year of net fund inflows.

So, the long-term trend of expansion in our revenue base remains unchanged. Global Merchant Banking is now booking constant revenue as a result of its past investments.

And in Global Investment Banking, even though there was a downturn in the equity finance markets due to the depressed stock markets, we are able to maintain our high market share. Nomura has a solid client base, stable financial position and many talented employees.

By making full use of these strengths, we will make investments to ensure each business division delivers world-class products and services and promptly steer the company back to growth. That concludes today's presentation.

We would now like open the line to questions. Thank you.

Question and Answer

Thank you very much for your taking time. And that concludes today's conference call.

Thank you.