Nomura avoids second quarterly loss Nomura narrowly averted a second quarterly loss, helped by a one-off gain from the sale of a private equity investment and higher trading revenues in its global markets businesses. Japan's largest investment bank, which is struggling to turn around its overseas operations, posted net income of Y17.8bn ($233m) in the three months to the end of December, as revenues rose 34 per cent from the previous quarter to Y404.9bn. IN Banks The results were better than analysts" forecasts of a small loss, but much of the gains were due to the sale of Skylark, a restaurant chain, which Nomura Principal Finance acquired in 2006. Without that sale, the bank's investment banking division, which made net revenues of Y23.4bn and had expenses of Y28bn, would have made a second quarterly loss reflecting the difficulties it faces in its overseas operations. The sale of private equity investments, which brought in Y34.6bn, helped the division post a pre-tax profit of Y29.4bn. Despite the small third-quarter profit Nomura still faces the risk of a downgrade by Moody's, the credit rating agency, which warned in November that it was reviewing the bank's rating due to the ongoing losses in its international capital markets business. Continuing weakness in trading activity and a lack of financing deals are expected to keep Nomura's profits under pressure, investors said. There is no profit driver. It is difficult to see any light at the end of the tunnel," said a senior fund manager at a Japanese asset management company. A credit downgrade of one notch would leave Nomura just above junk status, which would put the bank in an extremely difficult situation in terms of its funding costs, said Mana Nakazora, credit analyst at BNP Paribas in Tokyo. The bank's global wholesale business, which reported losses in the first two quarters of the year, rebounded to a pre-tax profit of Y37.8bn. But in a sign of the continuing turbulence it faces in its global wholesale business, Nomura recently fired Jesse Bhattal, head of the global wholesale division, who was tasked with making the division profitable, and Tarun Jotwani, head of global markets, was let go. The retail business, which has been Nomura's most reliable profit-driver, suffered a 56 per cent drop in pre-tax profits to Y10.1bn. Pre-tax profits from its asset management division, another stable profit-earner, also declined 24 per cent year-on-year to Y4.2bn.