Nomura nets ¥3.8 billion from CVA and DVA gains

Windfall offsets previous quarter’s loss more than three times over

Credit and debit valuation adjustments (CVA and DVA) to Nomura’s derivatives book swung in the bank’s favour in the three months to end-September, netting it ¥3.8 billion ($33 million) in income.

The gain wiped out the previous quarter’s CVA and DVA, which had torn a ¥1.8 billion hole in the net income line.

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CVA and DVA seek to capture the impact on derivatives’ value from changes in counterparties’ creditworthiness. DVA arises from a change in a party’s own credit standing, CVA from

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