(Bloomberg) -- Nomura Holdings Inc. raised its profit targets following a year of record earnings, as Chief Executive Officer Kentaro Okuda pushes for stable growth.

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Japan’s biggest brokerage seeks to post at least ¥750 billion ($4.7 billion) in annual pretax income by the year ending March 2031, exceeding its previous goal of more than ¥500 billion, it said in a presentation to investors on Thursday. It also plans to deliver a yearly return on equity — a key profitability measure — of at least 10% to 12%, up from its earlier target of 8% to 10% or more.

“Earning power has improved steadily” since the firm released its 2030 vision two years ago, Okuda said in the presentation. “We continue working toward sustainable growth and further improvement in our ability to generate profits.”

Nomura posted a second straight year of record net income in the 12 months ended March, as Japan’s financial market recovery boosted trading and investment banking. Still, the firm’s stock price has fallen almost 4% this year, compared with gains at domestic rival Daiwa Securities Group Inc. and Japan’s three biggest banks.

Okuda and other executives are scheduled to deliver presentations on Friday, and journalists may ask them about the sluggish share performance.

The company also announced cost cuts totaling $500 million, underscoring Okuda’s focus on keeping expenses under control while the company pushes to lift the top line. Measures include building an operational model enabled by artificial intelligence and reviewing the information technology architecture.

The brokerage’s wholesale division housing securities traders and investment bankers lifted its ROE target for fiscal 2030 to more than 10%, from the previous 8%-10%. Headed by Wall Street veteran Christopher Willcox, who previously led JPMorgan Chase & Co.’s asset management unit, Nomura’s wholesale division last fiscal year posted its highest pretax profit as stock trading and merger advisory revenue grew.

The presentation materials also signaled that Okuda will press ahead with his initiative to steer Nomura toward private markets for growth. That’s coming as concerns persist around the globe on the business of allowing investors to gain exposure to loans made by non-banks.

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Asset Manager

The investment management division is targeting an expansion in its assets under management by about a third to ¥180 trillion by March 2031, with private assets accounting for as much as 6% — or roughly ¥11 trillion. Those investments currently make up 3% of the total, implying that Nomura plans to sell more of such products to clients.

Nomura Asset Management International — comprising Nomura Capital Management LLC, Nomura Corporate Research and Asset Management Inc., and operations acquired from Macquarie Group Ltd. — are looking to increase their combined private credit assets under management to $5 billion or more by March 2031 from the present level of around $500 million, the brokerage said.

Nomura also intends to use artificial intelligence to offer more personalized services to a broader range of clients, while wealth and investment managers will rely more on AI assistants, Okuda said in the presentation.

Other goals:

The wholesale division targets boosting revenue from its equity business by 20% to 30% in the coming five years, and from its global advisory business by 50% It plans to expand into commercial real estate as well as credit businesses related to Central and Eastern Europe, the Middle East, and Africa The division aims to lower its cost-to-income ratio to below 80% over that period compared with its previous “approximately 80%” target, meaning tighter control on expenses The wealth management division seeks to expand its recurring revenue assets under management to ¥41 trillion, higher than the previous ¥37 trillion target and compared with ¥27.9 trillion as of the end of March The investment management segment aims to earn as much as ¥150 billion in annual pretax profit by the year ending March 2031, above the previous ¥100 billion goal

(With more details from Nomura presentations)

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