Nomura Holdings Inc. said Tuesday its group net profits dived 79 percent in the April-December period from a year earlier to 28.60 billion yen.
The company blamed the plunge primarily on refunds associated with the halt of popular "chukoku" funds and a drop in commissions.
Pretax profits plummeted 65 percent from the corresponding nine-month period to 79.39 billion yen on a 20.6 percent fall in operating revenues to 773.62 billion yen.
The holding company, launched Oct. 1, has Nomura Securities Co., the core of the Nomura group, under its wing.
Per-share net profits dived to 14.56 yen from 78.74 yen.
Nomura cited lower commissions stemming from the faltering stock market. The Nikkei stock average skidded below the 10,000 line following the Sept. 11 terror attacks in the United States. Commissions in the reporting period shrank 25.3 percent to 74.8 billion yen.
The brokerage also blamed the profit dive on the massive refunding in September to investors who put money in chukoku funds, which have a heavy concentration of government bonds.
Nomura ended chukoku management due to Japan's introduction of a mark-to-market accounting rule. Its holdings of the funds peaked at 3.9 trillion yen last year.
The rule, which went into effect in April, obliged brokerages to stop including latent gains on the holdings of midterm government bonds with maturities of two to four years in computing fund yields.
The change forced cuts to chukoku fund yields, and Nomura decided to reimburse clients who put money into the funds, cutting its commissions.