LHV Group results in October 2023
LHV Group’s October results were driven by the profitable operations of all subsidiaries and the pre-financing of subordinated loans.
The consolidated deposits of AS LHV Group increased by EUR 69 million in October. Fixed-term deposits increased by EUR 105 million (EUR 27 million of which growth in deposits through platforms), while demand deposits decreased by EUR 35 million. The Group’s consolidated loan portfolio increased by EUR 49 million in October. Retail loans increased by EUR 13 million and corporate loans by EUR 36 million. The volume of funds managed by LHV increased by EUR 1 million over the month. A total of 5.2 million payments from financial intermediary clients were processed in the course of the month.
In October, the consolidated net profit of AS LHV Group was EUR 11.2 million. In October, AS LHV Pank earned EUR 11.5 million in net profit, AS LHV Varahaldus EUR 84 thousand, AS LHV Kindlustus EUR 107 thousand, and LHV Bank Limited EUR 805 thousand. The Group’s return on equity was 24.9% in October.
The number of clients in LHV Pank increased by 3,800 in October and deposits reached record levels. Deposit-taking has been a clear focus in the last months of the year, fuelled by the high interest rate paid on fixed-term deposits. Despite the slowdown of the real estate market, the number of retail loans increased thanks to the strong issuance of home loans, as well as student loans. While credit quality remains good, the bank has added cautious model-based impairments. LHV Pank’s expenses were in line with the financial plan.
The results of Varahaldus were affected by the downturn in markets in October, but larger pension funds maintained value. LHV’s larger actively-managed funds, such as L and XL, were modestly in positive territory, while the high equity risk funds Indeks and Roheline fell. Pillar III funds also attracted attention, with changes at the end of the month to the terms and fund names to make them more understandable to clients. In the profitable month, both the operating income and operating expenses of LHV Varahaldus were in line with the financial plan.
It was also a positive month for LHV Kindlustus, although, as is typical of the season, it was necessary to engage in storm damage compensation. A total of 6,300 claims were registered during the month. In October, clients entered into 15,900 new insurance contracts with a volume of EUR 3.2 million and the number of the valid insurance contracts increased to 227 thousand. Net earned premiums grew by 5% in the month.
LHV Bank continued its development activities to launch a deposit product for regular clients and to create a mobile channel. A total of EUR 30 million was raised through the deposit platform in October, with plans to join two more deposit platforms in the near future. LHV Bank’s loan portfolio increased by EUR 6 million, to EUR 66 million.
The Group’s financial plan is on track, and both revenues and expenses were in line with the financial plan in October. At the level of the parent company, the results for the month were affected by the pre-financing of subordinated loans, as the company informed bond investors about the early redemption of subordinated bonds maturing in 2028 at the end of November.
To access the reports of AS LHV Group, please visit the website 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 employs over 1,050 people. As at the end of October, LHV’s banking services are used by 411,000 clients, the pension funds managed by LHV have 124,000 active clients, and LHV Kindlustus protects a total of 161,000 clients. LHV Bank, a subsidiary of the Group, holds a banking licence in the UK and provides banking services to international financial technology companies, as well as loans to small and medium-sized enterprises.
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