TIDM44WU
RNS Number : 2079X
Nomura Bank International PLC
01 December 2010
NOMURA BANK INTERNATIONAL PLC
HALF YEAR REPORT
30 SEPTEMBER 2010
+--------------------------------------------------------------------------+
| NOMURA BANK INTERNATIONAL PLC |
| MANAGEMENT REPORTFOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED) |
| The Half Year Report is comprised of a management review and the |
| financial statements of Nomura Bank International plc (the "Bank") for |
| the period from 1 April 2010 to 30 September 2010. |
| |
| |
| PRINCIPAL ACTIVITIES |
| |
| The Bank's principal activities remain unchanged from those detailed in |
| its statutory accounts for the year ended 31 March 2010 and include: |
| |
| · Issuance of guaranteed credit and equity linked notes and |
| certificates; |
| · Provision of sub-participations and structured loans (including |
| bridge and warehouse financing); |
| · Purchase of structured credit assets and structured loans; |
| · Traditional banking products such as loans and credit facilities |
| in major currencies, repurchase and reverse repurchase transactions, |
| letters of credit and guarantees; and |
| · Taking deposits (including foreign exchange and other reference |
| linked deposits). |
| |
| The Bank has branches in Milan, Italy and Labuan, Malaysia. The Labuan |
| branch was granted an offshore banking licence by the Labuan Financial |
| Services Authority in the Labuan International Business and Financial |
| Centre on 28 June 2010. |
| |
| |
| BOARD OF DIRECTORS |
| |
| The current Directors and those who served during the period are as |
| shown below: |
| |
| David Young* - Non Executive Director and Chairman |
| (resigned 26 April 2010) |
| Dame Clara Furse* - Non Executive Director and Chairman |
| (appointed 26 April 2010) |
| Antonio Pironti* - Non Executive Director |
| Kieran Poynter * - Non Executive Director (appointed 30 June |
| 2010) |
| Sir Peter Walters* - Non Executive Director (resigned 30 |
| September 2010) |
| John Phizackerley - President and Chief Executive Officer |
| Kenji Yokoyama - Director |
| Mark Basten - Director |
| Paul Spanswick - Director |
| Carlo Pellerani - Director |
| Hiroshi Yoshizawa - Director (resigned 25 May 2010) |
| Mark Chapman - Director (resigned 20 October 2010) |
| |
| * Member of the Audit Committee of the Board |
| |
| Sir Peter Walters resigned as Chairman of the Audit Committee on 21 |
| September 2010, and was replaced by Kieran Poynter on that date. |
| |
+--------------------------------------------------------------------------+
REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS
The Bank's key financial performance indicators during the period were as
follows:
+-------------------------------+--------------+--------------+------+
| | Half Year | Half Year | |
| | Ended | Ended | |
| | 30 Sept 2010 | 30 Sept 2009 | |
+-------------------------------+--------------+--------------+------+
| | $'000 | $'000 | |
+-------------------------------+--------------+--------------+------+
| | | | |
+-------------------------------+--------------+--------------+------+
| Operating income/(loss) | 84,117 | (340,857) | |
+-------------------------------+--------------+--------------+------+
| Profit/(loss) on ordinary | | | |
| activities before taxation | 78,324 | (344,052) | |
+-------------------------------+--------------+--------------+------+
| Profit/(loss) on ordinary | 66,467 | (247,717) | |
| activities after taxation | | | |
+-------------------------------+--------------+--------------+------+
| | | | |
+-------------------------------+--------------+--------------+------+
NOMURA BANK INTERNATIONAL PLC
MANAGEMENT REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS (CONTINUED)
+----------------------------+--------------+---------------+-------+
| | | | |
| | 30 Sept 2010 | 31 Mar 2010 | |
+----------------------------+--------------+---------------+-------+
| | $'000 | $'000 | |
+----------------------------+--------------+---------------+-------+
| | | | |
+----------------------------+--------------+---------------+-------+
| Total assets | 24,071,213 | 24,027,545 | |
+----------------------------+--------------+---------------+-------+
| Total liabilities | 23,320,399 | 23,343,198 | |
+----------------------------+--------------+---------------+-------+
| Shareholders' funds | 750,814 | 684,347 | |
+----------------------------+--------------+---------------+-------+
| | | | |
+----------------------------+--------------+---------------+-------+
The Bank reported a profit on ordinary activities before tax for the half year
ended 30 September 2010, of $78,324,404 (30 September 2009: loss of
$344,052,499).
The increase in profit before ordinary activities before tax is largely
attributable to the impact of widening credit spreads on the Bank's note
issuance business. As the Bank's own credit is included in the fair value of
notes issued, the worsening of the credit market during the period has impacted
the valuation of the Bank's financial liabilities. As credit spreads have
widened, the balance sheet value of notes issued has decreased and profit on
ordinary activities before tax has increased. The profit and loss account for
the period to 30 September 2010 includes income of $67,414,220 related to own
credit (30 September 2009: loss of $323,576,628).
During the period the Bank has further strengthened its balance sheet by lending
proportionally more on a secured basis through the use of reverse repurchase
transactions ('Securities purchased under agreements to resell'). As at 30
September 2010, 67% of funds advanced were on a secured basis, compared to 58%
at 31 March 2010. It is the Bank's intention to continue to lend using a mixture
of secured and unsecured lending.
The Bank outsources a significant proportion of its support services under
service level agreements to the related departments of Nomura International plc
("NIP"). The Treasury department continues to manage the liquidity of the Bank
and provide asset and liability management for the balance sheet.
On 1 April 2010, the Bank changed its functional and presentation currency from
Sterling to US Dollar. The change in the functional currency is reported
prospectively from 1 April 2010 with the opening balance sheet and income
statement being translated at the US Dollar spot rate of exchange at that date.
Please refer to note 1 of these financial statements for more detail.
For the year ending 31 March 2011, the Bank will focus on and expand its
activities to support the global wholesale business of Nomura Holdings, Inc. and
its subsidiary undertakings ("the Nomura Group").
RISK MANAGEMENT
The Bank's market and credit risk is managed through the Board of Directors and
its Credit and Risk Management Committee which is chaired by the Global
Wholesale Head of Investment, Evaluation and Credit. The Bank's operational risk
is managed through the Board of Directors and the Executive Management
Committee, both of which are attended by the Nomura International plc ("NIP")
EMEA Head of Operational Risk upon invitation. The Bank's liquidity risk is
managed by the Group's Treasury Department. In addition, the Bank's conflicts
issues, legal risk, reputational risks and cross border booking risks are
managed through the appropriate dedicated committees of Nomura Europe Holdings
plc ("NEHS") pursuant to its outsourcing arrangements as well as board
delegation to the NEHS committees. In addition, the Bank's overall risk is also
monitored by the NEHS Board Risk Committee which considers the current risk
profile, risk appetite of NEHS and its subsidiaries and ensures the
establishment and maintenance of an appropriate risk control framework for the
NEHS Group. The Bank's financial risk management objectives and policies are
disclosed in note 22 of its statutory accounts for the year ended 31 March 2010.
NOMURA BANK INTERNATIONAL PLC
MANAGEMENT REPORT (CONTINUED)
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
GOING CONCERN
The Directors are not aware of any material uncertainties related to events or
conditions that cast doubt about the ability of the Company to continue as a
going concern. They have therefore prepared the financial statements on a going
concern basis.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The Directors confirm that, to the best of their knowledge, the condensed set of
financial statements on pages 5 to 12 has been prepared in accordance with the
Accounting Standards Board Statement "Half-Yearly Financial Reports" and that
the interim management report on pages 1-3 includes a fair review of the
information required by the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
By Order of the Board
Denise Dillon
Secretary
26 November 2010
NOMURA BANK INTERNATIONAL PLC
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
INDEPENDENT REVIEW REPORT TO NOMURA BANK INTERNATIONAL PLC
Introduction
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2010 which comprises a profit and loss account, statement of total
recognised gains and losses, balance sheet, cash flow statement and related
notes 1 to 4. We have read the other information contained in the half yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the company in accordance with guidance contained
in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performed
by the Independent Auditor of the Entity" issued by the Auditing Practices
Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our work, for this report,
or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the Directors. The Directors are responsible for preparing the half-yearly
financial report in accordance with the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
As disclosed in note1 the annual financial statements of the company are
prepared in accordance with United Kingdom Generally Accepted Accounting
Practice. The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with the Accounting Standards
Board Statement "Half-Yearly Financial Reports".
Our Responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Scope of Review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2010 is not prepared, in all
material respects, in accordance with the Accounting Standards Board Statement
"Half-Yearly Financial Reports" and the Disclosure and Transparency Rules of the
United Kingdom's Financial Services Authority.
Ernst & Young LLP
London
30 November 2010
NOMURA BANK INTERNATIONAL PLC
PROFIT AND LOSS ACCOUNT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
+----------------------------------+-------------+----------+--+-----------+----------+-------------+
| Note | Half Year | | Year | | Half Year |
| | Ended | | Ended | | Ended |
| | 30 Sept | | 31 Mar | | 30 Sept |
| | 2010 | | 2010 | | 2009 |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| | $'000 | | $'000 | | $'000 |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| INCOME | | | | | |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| Interest receivable and similar | 145,331 | | 152,014 | | 26,422 |
| income | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Interest payable and similar | (30,116) | | (56,120) | | (13,288) |
| charges | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| NET INTEREST INCOME | 115,215 | | 95,894 | | 13,134 |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Fees and commissions receivable | 6,080 | | 12,221 | | 4,842 |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Fees and commissions payable | (1,588) | | (1,211) | | (329) |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Dealing losses | (35,590) | | (491,627) | | (358,504) |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| TOTAL OPERATING INCOME (LOSS) | 84,117 | | (384,723) | | (340,857) |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Administrative expenses | (5,793) | | (5,704) | | (3,195) |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| PROFIT (LOSS) ON ORDINARY | | | | | |
| ACTIVITIES BEFORE TAXATION | 78,324 | | (390,427) | | (344,052) |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| 2 Tax on profit (loss) on | (11,857) | | 98,724 | | 96,335 |
| ordinary activities | | | | | |
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | (291,703) | | |
| PROFIT (LOSS) ON ORDINARY | 66,467 | | | | (247,717) |
| ACTIVITIES AFTER TAXATION | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------+-------------+----------+--+-----------+----------+-------------+
All of the above amounts are derived from continuing activities.
Included within dealing losses is income of $67,414,220 in relation to changes
in own credit risk. For March 2010 a loss of $390,427,995 (September 2009: loss
of $323,576,628) was included in relation to changes in own credit risk.
NOMURA BANK INTERNATIONAL PLC
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
+----------------------------------+-------------+----------+--+-----------+----------+-------------+
| | Half Year | | Year | | Half Year |
| | Ended | | Ended | | Ended |
| | 30 Sept | | 31 Mar | | 30 Sept |
| | 2010 | | 2010 | | 2009 |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| | $'000 | | $'000 | | $'000 |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+----------+--------------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Profit/(loss) for the period | 66,467 | | (291,703) | | (247,717) |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| Foreign currency gains | - | | 54,858 | | 72,797 |
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | (236,845) | | |
| TOTAL RECOGNISED GAINS/(LOSSES) | 66,467 | | | | (174,920) |
| RELATING TO THE YEAR | | | | | |
+----------------------------------+-------------+-------------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------+-------------+----------+--+-----------+----------+-------------+
.
NOMURA BANK INTERNATIONAL PLC
BALANCE SHEET - 30 SEPTEMBER 2010 (UNAUDITED)
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
| | 30 Sept | 30 Sept | | 31 Mar | 31 Mar |
| | 2010 | 2010 | | 2010 | 2010 |
+---------------------------+------------+------------+----------+-----------+------------+
| | $'000 | $'000 | | $'000 | $'000 |
+---------------------------+------------+------------+----------+-----------+------------+
| ASSETS | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Loans and advances to | | 7,081 | | | 21,837 |
| banks | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Loans and advances to | | 6,868,944 | | | 8,734,889 |
| affiliates | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Other loans and advances | | 11,683 | | | 26,260 |
+---------------------------+------------+------------+----------+-----------+------------+
| Securities purchased | | 13,750,164 | | | 12,132,489 |
| under agreements to | | | | | |
| resell | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Financial assets | | | | | |
| designated at fair value | | | | | |
| through profit and loss: | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| - Other financial | 773,414 | | | 709,172 | |
| instruments | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| | | 773,414 | | | 709,172 |
+---------------------------+------------+------------+----------+-----------+------------+
| Available-for-sale | | 149 | | | 144 |
| financial investments | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Derivative financial | | 1,661,926 | | | 2,350,841 |
| instruments | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Other assets | | 963,188 | | | 25,378 |
+---------------------------+------------+------------+----------+-----------+------------+
| Prepayments and accrued | | 34,664 | | | 26,535 |
| income | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
| TOTAL ASSETS | | 24,071,213 | | | 24,027,545 |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| LIABILITIES | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Customer accounts | | 31,792 | | | 48,932 |
+---------------------------+------------+------------+----------+-----------+------------+
| Securities sold under | | 882,209 | | | 1,351,850 |
| agreements to repurchase | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Borrowing from affiliates | | 7,078,807 | | | 7,712,178 |
+---------------------------+------------+------------+----------+-----------+------------+
| Borrowing from others | | 130,301 | | | 211,422 |
+---------------------------+------------+------------+----------+-----------+------------+
| Financial liabilities | | | | | |
| designated at fair value | | | | | |
| through profit and loss: | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| - Bonds and medium | 10,543,366 | | | 9,509,875 | |
| term notes | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| - Other financial | 764,414 | | | 688,861 | |
| instruments | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| | | 11,307,780 | | | 10,198,736 |
+---------------------------+------------+------------+----------+-----------+------------+
| Derivative financial | | 1,887,293 | | | 2,602,252 |
| instruments | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Accruals and deferred | | 68,770 | | | 63,301 |
| income | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| Other liabilities | | 1,932,620 | | | 1,154,527 |
+---------------------------+------------+------------+----------+-----------+------------+
| Deferred tax liability | | 827 | | | - |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
| TOTAL LIABILITIES | | 23,320,399 | | | 23,343,198 |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| CAPITAL AND RESERVES | | | | |
+----------------------------------------+------------+----------+-----------+------------+
| Called up share capital | | 555,000 | | | 555,000 |
+---------------------------+------------+------------+----------+-----------+------------+
| Profit and loss account | | 189,487 | | | 123,020 |
+---------------------------+------------+------------+----------+-----------+------------+
| Redenomination reserve | | 3,108 | | | - |
+---------------------------+------------+------------+----------+-----------+------------+
| Other reserve | | 3,219 | | | 6,327 |
| | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| SHAREHOLDERS' FUNDS | | 750,814 | | | 684,347 |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| | | | | | |
+---------------------------+------------+------------+----------+-----------+------------+
| TOTAL LIABILITIES AND | | | | | |
| SHAREHOLDERS' FUNDS | | 24,071,213 | | | 24,027,545 |
+---------------------------+------------+------------+----------+-----------+------------+
APPROVED BY THE BOARD:
John Phizackerley
26 November 2010
NOMURA BANK INTERNATIONAL PLC
CASH FLOW STATEMENT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
Reconciliation of operating profit to net operating cash flows
+---------------------------------+-------------+--------------+-------------+
| | Half Year | Year | Half Year |
| | Ended | Ended | Ended |
+---------------------------------+-------------+--------------+-------------+
| | 30 Sept | 31 Mar | 30 Sept |
| | 2010 | 2010 | 2009 |
+---------------------------------+-------------+--------------+-------------+
| | $'000 | $'000 | $'000 |
+---------------------------------+-------------+--------------+-------------+
| Profit/(loss) on ordinary | 78,324 | (390,427) | (344,052) |
| activities before taxation | | | |
+---------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------+-------------+--------------+-------------+
| Adjustments for: | | | |
+---------------------------------+-------------+--------------+-------------+
| | 14,577 | (11,198) | (452,871) |
| Operating activities: | | | |
| | | | |
| Net change in other loans and | | | |
| advances | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in loans and | 1,865,945 | (344,942) | 8,850,349 |
| advances to affiliates | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in borrowing from | (56,269) | 71,585 | 972,623 |
| banks and other customers | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in borrowings from | (633,371) | 3,776,480 | (2,824,316) |
| affiliates | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in financial assets | (64,242) | (374,126) | 350,832 |
| designated at fair value | | | |
| through profit and loss | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in financial | 1,109,044 | 7,781,016 | 2,395,161 |
| liabilities designated at fair | | | |
| value through profit and loss | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in available for | (5) | - | - |
| sale financial investments | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in derivative assets | 688,915 | (1,930,499) | (330,329) |
+---------------------------------+-------------+--------------+-------------+
| Net change in derivative | (714,959) | 1,192,766 | (172,761) |
| liabilities | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in securities | (1,617,675) | (12,789,325) | (9,862,645) |
| purchased under agreements to | | | |
| resell | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in securities sold | (469,641) | 1,425,037 | 1,468,129 |
| under agreements to repurchase | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in other assets | (937,810) | 30,240 | (422,331) |
+---------------------------------+-------------+--------------+-------------+
| Net change in other liabilities | 767,384 | 1,154,917 | 312,551 |
+---------------------------------+-------------+--------------+-------------+
| Net change in prepayments and | (8,129) | (27,064) | (517) |
| accrued income | | | |
+---------------------------------+-------------+--------------+-------------+
| Net change in accruals and | 5,469 | 41,220 | 17,099 |
| deferred income | | | |
+---------------------------------+-------------+--------------+-------------+
| | | | |
| Financing activities: | | | |
+---------------------------------+-------------+--------------+-------------+
| Issuance of share capital | - | 300,000 | - |
+---------------------------------+-------------+--------------+-------------+
| Other non cash items: | | | |
+---------------------------------+-------------+--------------+-------------+
| Foreign exchange revaluation | (31) | 29,923 | 9,277 |
+---------------------------------+-------------+--------------+-------------+
| | (50,798) | 326,030 | 310,251 |
+---------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------+-------------+--------------+-------------+
| Net cash flow from operating | 27,526 | (64,397) | (33,801) |
| activities | | | |
+---------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------+-------------+--------------+-------------+
| Taxation | (290) | (33,216) | (33,344) |
+---------------------------------+-------------+--------------+-------------+
| | | | |
+---------------------------------+-------------+--------------+-------------+
| Increase/(decrease) in cash | 27,236 | (97,613) | (67,145) |
+---------------------------------+-------------+--------------+-------------+
NOMURA BANK INTERNATIONAL PLC
CASH FLOW STATEMENT (CONTINUED)
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2010 (UNAUDITED)
ANALYSIS OF THE BALANCES OF CASH AS SHOWN IN THE BALANCE SHEET:
+------------------------------------+--------------+-----------+----------+------------+
| | | | |
+------------------------------------+--------------+-----------+-----------------------+
| | 30 Sept 2010 | Cash Flow | 31 Mar 2010 |
+------------------------------------+--------------+-----------+-----------------------+
| | $'000 | $'000 | $'000 |
+------------------------------------+--------------+-----------+-----------------------+
| | | | |
+------------------------------------+--------------+-----------+-----------------------+
| Loans and advances to other banks | | | |
| repayable on demand | 7,081 | (14,756) | 21,837 |
| Borrowing from other banks | | | |
| repayable on demand | - | 41,992 | (41,992) |
+------------------------------------+--------------+-----------+-----------------------+
| | 7,081 | 27,236 | (20,155) |
| | | | |
+------------------------------------+--------------+-----------+-----------------------+
| | 31 Mar 2010 | Cash Flow | 31 Mar 2009 |
+------------------------------------+--------------+-----------+-----------------------+
| | $'000 | $'000 | $'000 |
+------------------------------------+--------------+-----------+-----------------------+
| | | | |
+------------------------------------+--------------+-----------+-----------------------+
| Loans and advances to other banks | | | |
| repayable on demand | 21,837 | (55,621) | 77,458 |
| Borrowing from other banks | | | |
| repayable on demand | (41,992) | (41,992) | - |
+------------------------------------+--------------+-----------+-----------------------+
| | (20,155) | (97,613) | 77,458 |
| | | | |
+------------------------------------+--------------+-----------+-----------------------+
| | | | |
+------------------------------------+--------------+-----------+-----------------------+
| | 30 Sept 2009 | Cash Flow | 31 Mar |
| | | | 2009 |
+------------------------------------+--------------+----------------------+------------+
| | $'000 | $'000 | $'000 |
+------------------------------------+--------------+----------------------+------------+
| | | | |
+------------------------------------+--------------+----------------------+------------+
| Loans and advances to other banks | | | |
| repayable on demand | 10,313 | (67,145) | 77,458 |
+------------------------------------+--------------+----------------------+------------+
| | 10,313 | (67,145) | 77,458 |
+------------------------------------+--------------+----------------------+------------+
| | | | | |
+------------------------------------+--------------+-----------+----------+------------+
NOMURA BANK INTERNATIONAL PLC
NOTES TO HALF YEAR REPORT - 30 SEPTEMBER 2010 (UNAUDITED)
1. ACCOUNTING POLICIES
The annual financial statements of the Bank are prepared in accordance with
United Kingdom Generally Accepted Accounting Practice. As at the interim
reporting date, the Bank's accounting policies remain unchanged from those
disclosed in its annual financial statements for the year ended 31 March 2010
apart from the amendments given below.
a) Basis of Accounting
For the purposes of its interim reporting, the Bank has complied with
the guidance given in the ASB's 'Statement: Half-Yearly Financial Reports'
issued in July 2007. The financial information set out in this Half Year Report
does not constitute the Bank's statutory accounts within the meaning of section
435 of the Companies Act 2006. Those accounts were prepared for the year to 31
March 2010 under United Kingdom Generally Accepted Accounting Practice and have
been reported on by the Company's auditors and delivered to the Registrar of
Companies. The auditor's report was unqualified and did not contain a statement
under section 498 (2) or (3) of the Companies Act 2006.
b) Change in functional and reporting currency
Following the acquisition of Lehman Brothers' European and Asia
discrete businesses by Nomura, the Bank decided to change its functional and
presentation currency from Sterling to US Dollar. The business in key European
entities significantly changed, resulting in a shift in the currency in which
revenues will predominately be generated and expenses denominated. The change in
functional and presentation currency is reported prospectively from 1 April 2010
with the opening balance sheet being translated at the US Dollar spot rate of
exchange at that date.
For the purpose of prior year comparatives restated in the presentation currency
of US Dollars, the Bank's shareholders' funds at 1 April 2009 and 31 March 2010
have been translated using the rate prevailing on those dates. The profit and
loss accounts and cash flow statements for comparative periods are converted
into US Dollars using the appropriate average rate for those periods. The share
capital at 31 March 2010 is shown as $555,000,000, which is the legal issued
share capital as at 1 April 2010, when it was redenominated into US Dollars. The
restatement of prior year comparatives in the presentation currency of US
Dollars has resulted in the reporting of foreign currency gains in the statement
of total recognised gains and losses and the creation of a Foreign Currency
Translation Reserve ("FCTR"). At 31 March 2010, an amount of $54,858,000 on the
FCTR is presented in the Profit and Loss Reserve. On 1 April 2010, this amount
was transferred from the FCTR to the Profit and Loss Reserve
2. TAXATION ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
(a) TAX GAIN/(CHARGE)
+-----------------------------+------------+-----------+------------+
| | Half Year | Year | Half Year |
| | Ended | Ended | Ended |
+-----------------------------+------------+-----------+------------+
| | 30 Sept | 31 Mar | 30 Sept |
| | 2010 | 2010 | 2009 |
+-----------------------------+------------+-----------+------------+
| | $'000 | $'000 | $'000 |
+-----------------------------+------------+-----------+------------+
| Current tax: | | | |
+-----------------------------+------------+-----------+------------+
| UK Corporation tax | (11,122) | 97,720 | 66,528 |
| (charge)/credit at 28% | | | |
+-----------------------------+------------+-----------+------------+
| Foreign tax credit/(charge) | 92 | (107) | - |
+-----------------------------+------------+-----------+------------+
| | (11,030) | 97,613 | 66,528 |
+-----------------------------+------------+-----------+------------+
| Deferred Taxation: | | | |
+-----------------------------+------------+-----------+------------+
| Current year timing | (827) | 1,111 | 66 |
| differences | | | |
+-----------------------------+------------+-----------+------------+
| Unutilised losses for the | | | |
| period carried forward | - | - | 29,741 |
+-----------------------------+------------+-----------+------------+
| Tax on profit/(loss) on | (11,857) | 98,724 | 96,335 |
| ordinary activities | | | |
+-----------------------------+------------+-----------+------------+
NOMURA BANK INTERNATIONAL PLC
NOTES TO HALF YEAR REPORT - 30 SEPTEMBER 2010 (UNAUDITED)
2. TAXATION ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
(b) RECONCILIATION OF CORPORATION TAX CHARGE
+-----------------------------+------------+-----------+------------+
| | Half Year | Year | Half Year |
| | Ended | Ended | Ended |
+-----------------------------+------------+-----------+------------+
| | 30 Sept | 31 Mar | 30 Sept |
| | 2010 | 2010 | 2009 |
+-----------------------------+------------+-----------+------------+
| | $'000 | $'000 | $'000 |
+-----------------------------+------------+-----------+------------+
| Net profit/(loss) before | 78,324 | (390,427) | (344,052) |
| Tax | | | |
+-----------------------------+------------+-----------+------------+
| | | | |
+-----------------------------+------------+-----------+------------+
| UK Corporate tax | (21,931) | 109,320 | 96,335 |
| (charge)/credit at 28% | | | |
+-----------------------------+------------+-----------+------------+
| Effects of: | | | |
+-----------------------------+------------+-----------+------------+
| Higher/(lower) tax rates on | 92 | (107) | - |
| overseas earnings | | | |
+-----------------------------+------------+-----------+------------+
| Timing differences | (72) | (133) | (66) |
+-----------------------------+------------+-----------+------------+
| Utilisation of brought | 10,881 | | |
| forward losses | | | |
+-----------------------------+------------+-----------+------------+
| Unutilised losses for the | - | (11,467) | (29,741) |
| period carried forward | | | |
+-----------------------------+------------+-----------+------------+
| Current corporation tax | | | |
| (charge)/credit for the | (11,030) | 97,613 | 66,528 |
| year | | | |
+-----------------------------+------------+-----------+------------+
3. RELATED PARTY TRANSACTIONS
The Bank has taken advantage of the exemption in FRS 8 from disclosing related
party transactions with other entities included in the consolidated financial
statements for Nomura Holdings, Inc., the Bank's ultimate parent company. Copies
of the financial statements of Nomura Holdings, Inc. can be obtained from 9-1,
Nihonbashi 1-chome, Chuo-ku, Tokyo 103-8645.
4. CONTINGENT LIABILITIES
HM Revenue & Customs
In 1998 the Bank sold its leasing business to a third party. HM Revenue &
Customs has made an assessment of GBP6.4 million ($10 million) which remains
unpaid by the new owners. As at 30 September 2010, the additional interest on
this tax assessment balance stands at an estimated GBP4.3 million ($6.8
million). The Bank's Directors have sought legal advice and believe that the
assessment has been wrongly made against the Bank. The Bank has, therefore,
appealed the assessment and intends vigorously to contest the matter.
WestLB
In April 2009, WestLB AG ("West LB") served proceedings on NIP and the Bank,
claiming that under the terms of a note issued by the Bank and maturing in
October 2008, West LB were entitled to receive approximately $22 million, which
it claimed to be the value of a fund of shares referable to the note. On 11
November 2010, the High Court in London dismissed WestLB's claim.
Commitments
The Bank had commitments as at 30 September 2010 amounting to $1,204,261,000 (31
March 2010: $1,177,392,000) in respect of undrawn note issuance facilities and
loan commitments.
NOMURA BANK INTERNATIONAL PLC
NOTES TO HALF YEAR REPORT - 30 SEPTEMBER 2010 (UNAUDITED)
CONTINGENT LIABILITIES (CONTINUED)
Bank levy
In The Emergency Budget on 22 June 2010, the Chancellor announced the
introduction of a bank levy from 1 January 2011. The levy will apply to the
balance sheets of UK banking groups and building societies. It will be based on
total liabilities, less certain specified deductions. The Bank expects to be
liable for this levy, but it is not currently possible to accurately estimate
the financial impact at the time of signing of these financial statements, as
the scope and rate of the levy have not yet been finalised.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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