LHV Group — Earnings Release 2023

Nov 14, 2023

LHV Group

Strong result in all business lines

Financial results, EURt	13 months	Oct 23	YTD23	YTD22		FP YTD A YTD FP
Total net income, incl.		27,558	252.322	134,332	247.272	+5,050
Net interest income		22,938	209,086	98,318	204,311	+4,776
Net fee and commission income		4,367	42,213	36,973	41,539	+674
Total operating expenses		11,564	108,033	71,303	107,631	+402
Earnings before impairment		15,994	144,289	63,029	139,641	+4,648
Impairment losses		2.974	5,083	8,414	4.954	+129
Income tax expense		1.863	18,880	10,578	18.897	+983
Net profit, incl.		11,157	119,326	44,038	115,790	+3,536
attr. to shareholders		10.977	118,040	42,472	114.732	+3,308
Business volumes, EURm	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Deposits from customers		5,386	5,386	4,920	5.425	-40
Loans (net)		3,425	3,425	3,172	3,424	+0
Assets under management		1,452	1,452	1,293	1,500	-48
Fin. intermediaries' payments, thous. pcs		5,211	38,750	20,688	33,668	+5,082
Key figures	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Cost / income ratio (C/I)		42.0%	42.8%	53.1%	43.5%	- 0.7 pp
Net interest margin (NIM)		4.1%	3.9%	1.8%	3.8%	+ 0.1 pp
pre-tax ROE*		29.0%	35.3%	17.8%	34.3%	+ 1.0 pp
ROE*		24.9%	30.2%	14.3%	29.4%	+ 0.8 pp

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LHV Pank A month with the historically highest deposit volume

Financial results, EURt	13 months	Oct 23	YTD23	YTD22		FP YTD A YTD FP
Total net income, incl.		23,250	211,776	124,322	205,944	+5,831
Net interest income		21,005	189,899	98,401	183,502	+6,398
Net fee and commission income		1,866	20,640	26,611	21,482	-842
Total operating expenses		6,998	69,363	52,418	69,874	-511
Earnings before impairment		16,252	142,413	71,904	136,070	+6,343
Impairment losses		2,954	4,738	3,112	4,186	+552
Income tax expense		1,822	18,409	9,497	17,313	+1,096
Net profit		11,476	119,266	59,295	114,571	+4,695
Business volumes, EURm	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Deposits from customers		5,274	5,274	4,952	5,215	+59
incl. banking services' deposits		878	878	1,318	896	-17
Loans (net)		3,492	3,492	3,152	3,400	+92
Key figures	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Cost / income ratio (C/I)		30.1%	32.8%	42.2%	33.9%	1.2 pp
Net interest margin (NIM)		3.9%	3.7%	1.9%	3.6%	+ 0.1 pp

• · The number of bank customers increased by 3,800. Income is slightly ahead of the plan and expenses are in line with the plan
• · Loan portfolio increased by 40 EURm, including corporate loans by 30 EURm and retail loans by 13 EURm. Intragroup loan to LHV Bank decreased by 3 EURm
• · Deposits increased by 18 EURm, including regular customers' deposits by 53 EURm. Banking services and platform deposits decreased by 31 and 3 EURm, respectively
• · · Credit quality remains at a good level, impairment losses were affected by an additional precautionary model-based impairment

THV

Larger pension funds preserved the value on falling markets

Financial results, EURt	13 months	Oct 23	YTD23	YTD22		FP YTD Δ YTD FP
Total net income		751	7,344	6,601	7,366	-22
Total operating expenses		539	5,698	6,046	5,804	-107
EBIT		212	1,646	555	1,562	+84
Net financial income		-128	39	-188	4/4	-436
Income tax expense	����	0	488	830	488	+0
Net profit		84	1,196	-463	1,548	-351
Business volumes	13 months	Oct 23	YTD23	YTD22		FP YTD A YTD FP
Assets under management, EURm		1,452	1,452	1,293	1,500	-48
Active customers of PII funds, thous.		124	124	130	125	-0
Key figures	13 months	Oct 23	YTD23	YTD22		FP YTD A YTD FP
Cost / income ratio (C/I)		86.5%	77.2%	94.3%	73.6%	+ 3.6 pp

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LHV Kindlustus A positive month despite the storm damages

Financial results, EURt	13 months	Oct 23	YTD23	YTD22		FP YTD A YTD FP
Total net income, incl.		502	3,803	1,298	3,729	+73
Net earned premiums		2,244	18,617	6,222	17,936	+681
Net incurred losses		1,467	12,776	4,431	12,333	+442
Other net income		-274	-2,039	-493	-1,874	-165
Total expenses		414	3,829	2,516	3,774	+55
Technical result		88	-26	-1,218	-45	+19
Net investment income		20	26	-16	121	-95
Other operating income and expenses		1	10	4	6	+5
Net profit		107	-11	-1,238	70	-81
Business volumes, EURt	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Gross written premiums		3,202	26,416	13,276	26,442	-26
No of customers (thous.)		161	161	150	na	na
Key figures	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Net loss ratio		65.4%	68.6%	71.2%	68.8%	- 0.1 pp
Net expense ratio		30.5%	32.0%	48.4%	31.9%	+ 0.1 pp

• · 15,900 insurance contracts with a volume of 3.2 EURm were signed
• In October, number of valid insurance contracts increased to 227,700 policies
• · Claims were compensated in the amount of 1.5 EURm and 6,300 new insurance cases were registered
• · Key expense indicators in a downward trend
• · · Net earned premiums grew 5% in a month

Focus on attracting deposits from retail customers

Financial results, EURt	13 months	Oct 23	YTD23	YTD22		FP YTD A YTD FP
Total net income, incl.		3,884	28,687	-60	26,362	+2,325
Net interest income		3,165	22,435	-60	21,512	+923
Net fee and commission income		707	6,319	0	4,917	+1,402
Other net income		12	-68	0	-67
Total operating expenses		3,060	25,485	7,873	24,326	+1,160
Earnings before impairment		824	3,201	-7,933	2,036	+1,165
Impairment losses		19	164	66	288	-423
Net profit		805	3,037	-7,999	1,448	+1,588
Business volumes, EURm	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Deposits from customers		184	184	0	272	-87
Loans (net)		દિક	66	21	101	-35
Key figures	13 months	Oct 23	YTD23	YTD22	FP YTD	A YTD FP
Cost / income ratio (C/I)		78.8%	88.8%	na	92.3%	- 3.4 pp
Net interest margin (NIM)		10.6%	13.1%	-0.3%	11.9%	1.2 pp +

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Madis Toomsalu madis.toomsalu@lhv.ee

Meelis Paakspuu meelis.paakspuu@lhv.ee