LHV Group — Earnings Release 2024

Dec 17, 2024

LHV Group

November results 17 December 2024

LHV Group Historically fastest loan growth amid declining interest rates

Financial results, EURt	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Total net income, incl.		26,193	311,278	281,094	318,584	-7,306
Net interest income		21.057	249.738	230,913	255,331	-5,593
Net fee and commission income		5,620	59,077	48,803	60.187	-1,109
Total operating expenses		11,204	135,568	119,467	137,742	-2,174
Earnings before impairment		14,988	175,710	161,627	180,842	-5,132
Impairment losses		2,924	19,742	7,102	21.126	-1,384
Income tax expense		1,830	21,521	21,869	22,278	-156
Net profit, incl.		10,235	134,448	132,656	137,439	-2,991
attr. to shareholders		10,156	133,438	131,178	136,558	-3,120
Business volumes, EURm	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Loans (net)		4,394	4,394	3,538	4,297	+96
Deposits from customers		6,517	6,517	5,386	6,560	-43
Assets under management		1,560	1,560	1,488	1,554	+6
Fin. intermediaries' payments, thous. pcs		6,316	67,664	43,647	64.759	+2,905
Key figures	13 months	Nov 24	YTD24	YTD23	FP YTD	A YTD FP
Cost / income ratio (C/I)		42.8%	43.6%	42.5%	43.2%	+ 0.3 pp
Net interest margin (NIM)		3.1%	3.5%	4.0%	3.7%	- 0.1 pp
pre-tax ROE*		22.5%	28.1%	35.1%	28.8%	- 0.7 pp
ROE*		19.1%	24.2%	30.0%	24.8%	- 0.6 pp

• Historically fastest growth of loan volumes, loan portfolio increased by 162 EURm
• Deposits from customers decreased by 48 EURm
• Results are driven by rapidly growing loan portfolio, while interest rates decline faster than anticipated
• Monthly net profit 10.2 EURm and ROE 19.1%
• Financial plan holds

LHV Pank Record-breaking business volumes

Financial results, EURt	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Total net income, incl.		20,617	249,900	235,209	255,618	-5,719
Net interest income		17,886	217,133	209,046	22,149	-5,016
Net fee and commission income		3,278	30,929	24,789	31,040	-111
Total operating expenses		7,251	84,787	76,656	86,383	-1,596
Earnings before impairment		13,366	165,113	158,552	169,236	-4,123
Impairment losses		2,817	19,131	6,752	20,579	-1,448
Income tax expense		1,535	21,185	20,357	21,509	-324
Net profit		9,014	124,797	131,443	127,148	-2,351
Business volumes, EURm	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Loans (net)		4,105	4,105	3,537	4,014	+91
Deposits from customers		5,977	5,977	5,197	6,053	-76
incl. banking services' deposits		1,152	1,152	799	1,099	+53
Key figures	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Cost / income ratio (C/I)		35.2%	33.9%	32.6%	33.8%	+ 0.1 pp
Net interest margin (NIM)		2.9%	3.3%	3.7%	3.4%	0.1 pp

• The number of bank customers increased by 3,700
• Loan portfolio increased by 124 EURm, incl. retail loans by 28 EURm and corporate loans by 96 EURm
• Deposits increased by 69 EURm, incl. regular customers' deposits decreased by 71 EURm, banking services customers' deposits increased by 199 EURm
• Change in environment requires strong reaction on expenses side, due to which LHV Pank is reducing the number of employees
• Credit quality strong, however we are making forward-looking impairments

LHV Bank Strong volume growth in corporate loans and financial intermediaries' area

Financial results, EURt	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Total net income, incl.		3,553	39,922	32,506	41,586	-1,665
Net interest income		2,962	31,315	25,523	31,913	-598
Net fee and commission income		୧୦3	8,597	6,956	9,625	-1,028
Other net income		-13	9	26	48	-30
Total operating expenses		2,455	34,476	28,150	34.475	+1
Earnings before impairment		1,098	5,445	4,357	7,111	-1,665
Impairment losses		107	611	169	547	+63
Income tax expense		248	-787	O	-355	-432
Net profit		743	5,622	4,187	6,918	-1,297
Business volumes, EURm	13 months	Nov 24	YID24	YTD23		FP YTD A YTD FP
Loans (net)		289	289	76	283	+6
Deposits from customers		619	619	229	580	+38
Key figures	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Cost / income ratio (C/I)		69.1%	86.4%	86.6%	82.9%	+ 3.5 pp
Net interest margin (NIM)		5.1%	6.5%	14.2%	6.8%	0.4 pp

• Loan portfolio increased by 37 EURm. Projects approved by the Credit Committee amounting to 172 EURm
• Deposits from platforms were reduced by 15 EURm to achieve more efficient loan to deposit ratio. In total, over 9,600 depositors
• Net interest income lower than planned due to lower deposits from banking services customers' and lower loan portfolio in previous months
• Net fee and commission income lower than planned due to increased pressure on financial intermediaries' market

LHV Varahaldus Net profit ahead of the plan, volumes and number of customers as planned

Financial results, EURt	13 months	Nov 24	YTD24	YTD23	FP YTD	A YTD FP
Total net income		738	8,171	8,075	8,175	= △
Total operating expenses		578	6,405	6,367	6,657	-252
EBIT		160	1,766	1,708	1,518	+247
Net financial income		72	606	188	593	+14
Income tax expense		0	801	488	801	+0
Net profit		231	1,572	1,407	1,311	+261
Business volumes	13 months	Nov 24	YTD24	YTD23	FP YTD	A YTD FP
Assets under management, EURm		1,560	1,560	1,488	1,554	+6
Active customers of PII funds, thous.		114	114	124	115	-0
Key figures	13 months	Nov 24	YTD24	YTD23	FP YTD	A YTD FP
Cost / income ratio (C/I)		71.4%	73.0%	77.1%	75.9%	2.9 pp
Funds average return		1.2%	9.5%	5.0%	7.0%	2.6 pp

• Strong results on stock markets due to U.S. election results
• M, L and XL increased by 0.2%, 0.7% and 0.5%, respectively, over the month. Indeks rose by 4.6%, while Roheline increased by 1.9% in value. Conservative funds S and XS increased by 0.5% and 0.4%, respectively
• The benchmark index growth in November 6.0%
• Nearly 14 thousand customers will start making larger II pillar contributions to LHV pension funds next year

LHV Kindlustus Stable profitable growth continues

Financial results, EURt	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Net earned premiums		3,052	31,708	23,473	31,018	+690
Commissions expense		397	4,113	2,755	3,796	+317
Gross incurred losses		2,101	20,785	15,472	20,000	+784
Operating expenses		453	4,944	4,271	5,108	-164
Insurance result without reinsurance		101	1,866	976	2,113	-247
Reinsurance result		20	895	923	1,343	-448
Total result from insurance activities		81	971	53	770	+201
Net other income		27	374	21	238	+137
Net profit		108	1,345	74	1,007	+338
Business volumes, EURt	13 months	Nov 24	YTD24	YTD23		FP YTD A YTD FP
Contract premiums written		2,994	34,997	28,944	33,892	+1,104
No of customers (thous.)		170	170	164	na	na
Key figures	13 months	Nov 24	YTD24	YTD23	FP YTD	A YTD FP
Net loss ratio		67.5%	66.0%	68.2%	66.1%	- 0.2 pp
Net expense ratio		29.5%	30.6%	32.0%	31.1%	0.5 pp

• 18,200 insurance contracts with a volume of 3 EURm were signed. Very good sales results in casco and MTPL insurance
• Claims were compensated in the amount of 2.1 EURm. A higherthan-usual number of MTPL incidents were registered
• Ahead of the financial plan in terms of both business volumes and profitability

Madis Toomsalu LHV Group CEO madis.toomsalu@lhv.ee

Meelis Paakspuu LHV Group CFO meelis.paakspuu@lhv.ee