Oct. 28 (Bloomberg) -- Nomura Holdings Inc., Japan’s largest brokerage, reported second-quarter profit that beat analysts’ estimates and resumed dividend payments as earnings from trading and investment banking increased.

Net income was 27.7 billion yen ($303 million) in the three months ended Sept. 30, compared with a loss of 72.9 billion yen a year earlier, the Tokyo-based brokerage said in a statement today. The average of five estimates from analysts surveyed by Bloomberg was for second-quarter profit of 11.5 billion yen.

The 2008 acquisition of parts of Lehman Brothers Holdings Inc., which resulted in a record loss last fiscal year, helped Nomura take advantage of a recovery in trading and stock sales in the past six months. Chief Executive Kenichi Watanabe, who turned 57 today, raised about $8 billion in stock sales this year to mend the company’s balance sheet and challenge Goldman Sachs Group Inc. and JPMorgan Chase & Co. in the U.S.

“Nomura’s dividend payout is an indication that the firm is returning to normalcy after a difficult year,” said Neil Katkov, the Tokyo-based head of Asia research at Celent LLC. “Japan’s financial institutions must expand internationally in order to grow, due to shrinking opportunities in the domestic Japanese market.”

Today’s profit, the company’s best quarterly result in more than two years, was built on a surge in revenue to 355.5 billion yen , from 257.7 billion yen in the same period a year earlier. It posted first-quarter profit of 11.4 billion yen.

Fees, Commissions

Nomura is the biggest arranger of equity and equity-linked sales in the Asia-Pacific region this year, up from eighth in 2008, according to data compiled by Bloomberg.

“We’ve been working on integrating Lehman’s business for a year, and making a profit was a pressing issue,” Chief Financial Officer Masafumi Nakada said at a briefing today.

Brokerage commissions increased to 95.4 billion yen, up from 84.9 billion yen a year earlier, while investment banking fees jumped to 15.6 billion yen from 10 billion yen. Trading profit was 148.5 billion yen from a loss of 21 billion yen a year earlier.

“Nomura’s earnings will keep improving as it can expect underwriting mandates for the third quarter and later,” Azuma Ohno, a Tokyo-based analyst at Credit Suisse Group AG, said before the announcement. “It’s important for the stock’s performance to show results from the overseas expansion.”

The company announced its second stock sale in six months on Sept. 24, sending its shares tumbling 16 percent in a day. It canceled a fourth-quarter dividend payout in January.

U.S. Expansion

Nomura plans to use proceeds from the latest stock sale to expand investment banking and fixed income operations in the U.S.

The company’s shares rose 0.3 percent to 643 yen at the 3 p.m. close of trading in Tokyo before the announcement. The stock has slipped 12 percent in 2009 while the Nikkei 225 Stock Average has gained 14 percent.

Nomura’s earnings recovery mirrors that of global rivals including Goldman Sachs and JPMorgan, as a rebound in stock and bond markets boosted revenue from trading and investment banking. Goldman shares have more than doubled this year and JPMorgan has advanced 39 percent.

Watanabe told 3,230 investors gathered at Nomura’s annual meeting in Tokyo on June 25 that he aimed to resume dividends.

The four yen per share payout announced today may help Watanabe woo individual shareholders who get near-zero interest rates on their bank deposits, said Toru Komatsu, chief executive officer of Komatsu Portfolio Advisors Co. in Tokyo.

“Dividend payment is very important, especially to individuals as banks don’t pay depositors much,” he said.

To contact the reporter on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net

Last Updated: October 28, 2009 04:34 EDT