LHV Group results in May 2023

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Since May, LHV Group has two separate banks in its consolidated group. The month’s results were driven by strong growth and profitability in both banks, as well as the high quality of the credit portfolio.

The consolidated deposits of AS LHV Group increased by EUR 248 million in May. Growth was driven by deposits from retail clients, payment intermediaries, and deposit platforms. Term deposits grew by EUR 163 million, while demand deposits increased by EUR 85 million. The consolidated loan portfolio grew by EUR 92 million over the month, with corporate loans increasing by EUR 75 million and retail loans by EUR 17 million. The volume of the funds managed by LHV decreased by EUR 13 million in May. In May, 3.9 million payments from financial intermediary clients were processed.

The consolidated net profit of AS LHV Group was EUR 12.1 million in May. AS LHV Pank earned EUR 12.1 million in net profit, and the profit of AS LHV Varahaldus was EUR 0.2 million. AS LHV Kindlustus showed a loss of EUR 86 thousand. The net profit of LHV’s UK subsidiary LHV Bank Limited amounted to EUR 0.3 million.

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The number of LHV banking clients increased by 3,800 in May. The strong month was also characterised by best growth of the year across a number of LHV Pank loan products, for example, the home loan portfolio grew by EUR 11 million in May. LHV Pank’s loan portfolio was also boosted by a EUR 25 million intra-group loan to LHV Bank.

The bank’s focus remains on deposits, as at the end of the month, LHV Pank raised the interest rate on the 12-month term deposit offered to clients to 4%. Deposits from retail clients increased by EUR 96 million, deposits from payment intermediaries by EUR 83 million, and deposits from the deposit platform by EUR 68 million. In May, rating agency Moody’s upgraded LHV Pank’s investment grade deposit rating outlook to positive, affirming its long-term bank deposit rating at Baa1.

LHV Bank Limited was granted a banking licence by the UK’s financial supervisor earlier this month, allowing it to start taking deposits. The name of the company has changed and preparations have started to transfer the business. LHV Bank’s loan portfolio has started to grow steadily. Revenues are higher than planned.

LHV Varahaldus performed according to plan in May, but profitability is modest compared to the financial plan, mainly due to lower financial income. The largest pension funds, L and XL, decreased by 0.4% and 0.6%, respectively, over the month. Pensionifond Indeks increased by 1.7%, Pensionifond Roheline lost 0.8% in value. Since June, a third member has been added to the Varahaldus Management Board: Eve Sirel is responsible for risk and operations management.

The portfolio of LHV Varahaldus continued to grow steadily in May, with 12,600 insurance contracts worth EUR 2.7 million. At the same time, operating results were impacted by an increase in loss and damage reserve. In May, the insurance company launched new claims handling software, while a business insurance product was launched for small and medium-sized enterprise clients, covering business property insurance, business interruption insurance, as well as business and employer liability insurance.

Due to better-than-planned revenues, LHV Group outperforms the financial plan in terms of profit by EUR 21 million. The Group’s return on equity was 30.8% in May.

AS LHV Group’s reports are available at: https://investor.lhv.ee/en/reports/.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited. The Group’s companies employ more than 940 people. As of the end of May, LHV’s banking services are being used by 398,000 clients, the pension funds managed by LHV have 129,000 active clients, and LHV Kindlustus protects a total of 160,000 clients. The Group’s subsidiary LHV Bank owns a banking licence in the United Kingdom and offers banking services to international fintech companies and loans to small and medium-sized enterprises.

 

Priit Rum
Communication Manager
Phone: +372 502 0786
Email: [email protected] 

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