NHI/NSC,NTB:R&I Downgrade to A,Stable/Affirm A+,Stable

NEWS RELEASE

Mar 31, 2021

R&I Downgrades to A, Stable, Affirms a-1: Nomura Holdings, Inc. R&I Affirms A+/a-1, Stable: Nomura Securities Co., Ltd., The Nomura Trust and Banking Co., Ltd.

Rating and Investment Information, Inc. (R&I) has announced the following:

ISSUER: Nomura Holdings, Inc. Issuer Rating: A, Previously A+ Rating Outlook: Stable

Commercial Paper: a-1, Affirmed

ISSUER: Nomura Securities Co., Ltd. Issuer Rating: A+, Affirmed Rating Outlook: Stable

Commercial Paper: a-1, Affirmed

ISSUER: The Nomura Trust and Banking Co., Ltd. Issuer Rating: A+, Affirmed Rating Outlook: Stable

Short-term Debts: a-1, Affirmed

RATIONALE: R&I has downgraded the Issuer Rating for Nomura Holdings, Inc. (NHI) because NHI became subject to the total loss-absorbing capacity (TLAC) requirements from end-March 2021 and its debt's structural subordination to subsidiaries' debt has been clarified. Since there is no major change in the creditworthiness of the entire Nomura Group, R&I has affirmed the Issuer Ratings for core company Nomura Securities Co., Ltd. (NSC) and The Nomura Trust and Banking Co., Ltd. (NTB) at A+. Note that this rating downgrade is not related to NHI's announcement that on March 26, an event occurred that could subject one of its U.S. subsidiaries to a significant loss arising from transactions with a U.S. client. The Nomura Group is Japan's largest securities firm group. It has an extremely robust franchise in the domestic market. Its retail client assets are the largest in Japan and far outpace those of industry peers. In the wholesale business, it has a leading position in the capital market and ranks among the top players in major league tables. Moreover, the asset management business is highly competitive. Overseas, the Group has a certain presence thanks to an enhanced market position in areas of focus. Although its business had been stagnant in the initial stage of the coronavirus pandemic, the revenue environment for the wholesale business has picked up substantially since early FY2020 (the year ending March 2021) and revenue from the retail business is also recovering gradually. In addition to traditional investment assets, such as listed stocks and bonds issued by governments and large companies, the Group has begun to pursue business opportunities in the private field, including unlisted companies' stocks, loans and alternative assets. Its U.S. infrastructure finance business is expanding, reflecting growing investor demand amid the low interest rate environment. With significant room for market development in Japan, the Group is strengthening the organization of each business unit. The Group's cost structure has improved through successful measures to rebuild its business platform, which started in 2019. In the wholesale business, the Group worked to allocate management

■Contact : Sales and Marketing Division, Customer Service Dept. TEL. +81-(0)3-6273-7471 E-mail. [email protected] ■Media Contact : Corporate Planning Division (Public Relations) TEL. +81-(0)3-6273-7273 Rating and Investment Information, Inc. TERRACE SQUARE, 3-22 Kanda Nishikicho, Chiyoda-ku, Tokyo 101-0054, Japan https://www.r-i.co.jp Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are not statements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment. R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is not liable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details, please refer to https://www.r-i.co.jp/en/docs/policy/site.html. ©Rating and Investment Information, Inc.

NEWS RELEASE

resources intensively to competitive products while scaling back low-margin operations, and this effort has paid off. For the retail business, it has been focusing on transactions with corporate clients, business owners and high-net-worth individuals that are expected to generate high profitability, and appears to begin reaping benefits gradually. With a decrease in the break-even point notably of the wholesale business and a considerable increase in revenue from global markets and other operations, the Group's cost to income ratio has improved remarkably compared to FY2018, when the overhaul of the business platform was not yet underway. The Group's revenue is susceptible to market conditions, with global markets accounting for a large proportion of the total. R&I emphasizes recurring revenue, a relatively stable source of earnings, and for highly volatile revenue from flow businesses, it examines the minimum level of client flow revenue that can be expected even in a stress environment. Eyes are on to what extent recurring revenue businesses, in which revenue is earned in proportion to client assets, will expand, as well as how the Group's increased market share in areas of focus will help bolster revenue from flow businesses. The Group's risk resilience is sound for the rating. Its trading account is larger and more complicated than those of domestic competitors, but the Group has been building a risk management structure according to its risk appetite and risk profile. While credit risk was on a decline thanks to the review of the wholesale business, the Group reduced exposure in response to a loss it incurred from loan-related positions due to the March 2020 coronavirus crisis. Its resilience to stress events associated with credit has strengthened. With respect to the March 26 event, the estimated amount of the claim against the client is approximately US$2 billion (approximately 220 billion yen) based on market prices as of March 26, according to NHI. This estimate is subject to change depending on unwinding of the transactions and fluctuations in market prices. While the ultimate amount of loss must be confirmed, R&I expects the rating impact to be limited given that the Group's solid cumulative profit in 1Q-3Q FY2020 (pretax income of 396.8 billion yen) can fully cover the loss and NHI has a robust capital base and comfortable liquidity. Even so, it is undeniable that there was a risk management issue that allowed excessively large exposure to a specific client, for example, though the exposure seems to have ballooned due to sharp price fluctuations. R&I will keep an eye on future developments, including NHI's risk appetite and the impact on the sustainability of its U.S. business, which has been faring well in the past few years.

Nomura Holdings, Inc. NHI is the holding company of the Nomura Group. While its stand-alone revenue/expenditure structure and financial profile are sound, the structural subordination inherent in a holding company has been clarified due to the application of the TLAC requirements to NHI. R&I has therefore downgraded the rating for NHI to one notch below the creditworthiness of the entire Group.

Nomura Securities Co., Ltd. NSC is the core company of the Nomura Group and plays a central role in the Group's operations in Japan. The rating directly reflects the creditworthiness of the entire Group.

The Nomura Trust and Banking Co., Ltd. NTB is a trust bank wholly owned by NHI. Its core business is investment trust administration, and the balance of investment trusts under management is increasing through transactions in and outside of the Group. As the Group is strengthening the solution business targeting high-net-worth individuals, NTB's banking and trust functions play a very significant role in the Group. Its risk resilience is sound, with NHI having subscribed to a capital increase of NTB in the first half of FY2020 in anticipation of business expansion. NTB is rated on par with NSC, the core company of the Group.

The primary rating methodologies applied to this rating are provided at "R&I's Basic Methodology for Corporate Credit Ratings", "Shared Rating Approach for Financial Institutions, etc.", "Securities Firms", "Depository Financial Institutions", "R&I's Analytical Approach to Financial Groups" and "R&I's

NEWS RELEASE

Analytical Approach to Regulatory Capital Instruments and Financial Institutions". The methodologies are available at the web site listed below, together with other rating methodologies that are taken into consideration when assigning the rating. https://www.r-i.co.jp/en/rating/about/rating_method.html

R&I RATINGS: ISSUER: Nomura Holdings, Inc. (Sec. Code: 8604) Issuer Rating RATING: A, Previously A+ RATING OUTLOOK: Stable

Unsec. Sub. Bonds No.2 Issue Date Maturity Date Issue Amount (mn) Nov 26, 2010 Nov 26, 2025 JPY 39,500 RATING: A, Affirmed

Unsec. Str. Bonds No.1* Issue Date Maturity Date Issue Amount (mn) Sep 04, 2018 Sep 04, 2023 JPY 100,000 RATING: A, Affirmed

Unsec. Str. Bonds No.2* Issue Date Maturity Date Issue Amount (mn) Sep 03, 2019 Sep 03, 2024 JPY 40,000 RATING: A, Affirmed

Unsec. Str. Bonds No.24 Issue Date Maturity Date Issue Amount (mn) Jun 24, 2010 Jun 24, 2025 JPY 22,000 RATING: A, Previously A+

Unsec. Str. Bonds No.27 Issue Date Maturity Date Issue Amount (mn) Sep 24, 2010 Sep 24, 2025 JPY 14,000 RATING: A, Previously A+

Unsec. Str. Bonds No.47 Issue Date Maturity Date Issue Amount (mn) Dec 25, 2014 Dec 24, 2021 JPY 6,700 RATING: A, Previously A+

Unsec. Str. Bonds No.50 Issue Date Maturity Date Issue Amount (mn) Aug 10, 2017 Aug 10, 2022 JPY 30,000 RATING: A, Previously A+

Unsec. Str. Bonds No.51 Issue Date Maturity Date Issue Amount (mn) Aug 10, 2017 Aug 09, 2024 JPY 20,000 RATING: A, Previously A+

Unsec. Str. Bonds No.52 Issue Date Maturity Date Issue Amount (mn) Aug 10, 2017 Aug 10, 2027 JPY 10,000

NEWS RELEASE

RATING: A, Previously A+

* Bonds that are subject to the structural subordination inherent in a holding company and classified as total loss-absorbing capacity (TLAC)-eligible liabilities under the TLAC standard

Commercial Paper ISSUE LIMIT (mn): JPY 300,000 SUPPORT: Unsecured RATING: a-1, Affirmed

ISSUER: Nomura Securities Co., Ltd. Issuer Rating RATING: A+, Affirmed RATING OUTLOOK: Stable

Commercial Paper ISSUE LIMIT (mn): JPY 1,000,000 SUPPORT: Unsecured RATING: a-1, Affirmed

ISSUER: The Nomura Trust and Banking Co., Ltd. Issuer Rating RATING: A+, Affirmed RATING OUTLOOK: Stable

Short-term Debts RATING: a-1, Affirmed

ISSUER: Nomura Europe Finance N.V. Nomura Global Finance Co., Ltd. Euro Note Prog. ISSUE LIMIT (mn): Nomura Europe Finance N.V.: USD 23,000 (or its equivalent in other currencies) Nomura Global Finance Co., Ltd.: USD 3,000 (or its equivalent in other currencies) SUPPORT: Guaranteed by Nomura Holdings, Inc. (NHI) or guaranteed by NHI and Nomura Securities Co., Ltd. (NSC) on a joint and several basis RATING: The portion guaranteed by NHI: A, Previously A+ The portion guaranteed by NHI and NSC on a joint and several basis: A+, Affirmed

A credit rating for a medium-term note (MTN) program is assigned to the program and not to individual notes issued under the program. The credit rating of individual notes is generally the same as that of the program. As regards credit-linked notes, index-linked notes or other notes, however,

NEWS RELEASE

there are some cases where the rating on each note will not be on par with the program or no rating will be assigned, depending on the details of the individual note contract. Upon the issuer's request, R&I may assign a credit rating to individual notes issued under the program.