The outlook reflects Daiwa's long-term strategy to build a revenue structure less susceptible to market volatility.

"We are aiming to increase revenue to 50 billion yen ($392 million) from the current 35 billion yen," Chief Executive Seiji Nakata said in an interview, referring to its merger-and-acquisitions (M&A) business.

There is no set time frame for the target, but it could be achieved "in two or three years if the current pace of growth is maintained," he added.

Daiwa has expanded its global network for M&A advisory in recent years though acquisitions, focusing on cross-border mid-cap deals worth between 50 billion yen and 100 billion yen ($392 million-$785 million).

Nakata said the mid-cap market is likely to stay solid despite the recent global economic uncertainty and market volatility triggered by the Russia-Ukraine war and monetary tightening in the United States.

"We kicked off this financial year (in April) with record levels of M&A pipeline in the U.S. and Europe," he said, pointing out that M&A deals are typically driven by long-term strategies of companies seeking synergy.

Daiwa's larger domestic rival, Nomura Holdings, hopes to beef up advisory revenue by more than 50% to about $750 million over the next three years, on the back of sustainability-related deals handled by clean tech M&A advisor Nomura Greentech.

($1 = 127.4200 yen)

(Reporting by Makiko Yamazaki and Miho Uranaka; Editing by Kim Coghill)

By Makiko Yamazaki and Miho Uranaka