TOKYO: US credit ratings agency Moody's raised its long-term rating on Nomura Securities by two notches to A3, its first upgrade in nearly nine years, acknowledging a turnaround at the Japanese brokerage under CEO Koji Nagai.
The upgrade to the low-risk rating from a previous Baa2, which was two notches above speculative grade, comes after Nomura in August raised its earnings per share (EPS) target to 100 yen by Tokyo Olympics year 2020 from a previous goal of 50 yen by March 2016.
Nomura Securities, a division of financial group Nomura Holdings, now has the same rating as Deutsche Bank AG . Nomura Holdings was also upgraded on Thursday to Baa1 from Baa3, one notch above Morgan Stanley.
Nomura said it was the first upgrade by Moody's since November 2005 and would help keep down borrowing costs and win business from rating-conscious customers.
"We expect to benefit from the upgrade through lower funding costs and further growth across our client businesses as we will meet the counterparty credit ratings requirements of more potential clients," the company said in a statement.
After assuming office in 2012 following an insider trading scandal involving Nomura employees, Nagai launched an overhaul including job cuts and a push to make its overseas operations profitable.
"The upgrade was prompted by the improvement in Nomura's financial metrics, driven in turn by ongoing changes to its business strategy and business model," Moody's said in a statement.
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