LHV Group — Interim / Quarterly Report 2021

Oct 19, 2021

LHV Group

Decent growth along with strong results

Strong quarter in bank's business volumes, volume of funds decreased

Financial results, EURt	9 quarters	$Q3-21$	$Q2-21$	$\Delta$ quarter
Net interest income	--------	25,857	22,927	$+2,929$
Net fee and commission income	a a conflorat	9,546	9,098	$+447$
Other income	▃▃▁▃▃▊▁▅▅	700	809	$-108$
Total revenue	an an East	36,103	32,834	$+3,268$
Total expenses	an an an Dù	15,251	17,925	$-2,674$
Earnings before impairment	a an an Dùbhl	20,852	14,910	$+5,942$
Impairment losses on loans	بالمسابق المسا	1,444	$-791$	$+2,235$
Income tax expense	aalaa ku li	2,819	2,785	$+34$
Net income	a an an Domh	16,589	12,916	$+3,674$
Business volumes, EURm	9 quarters	$Q3-21$	$Q2 - 21$	$\Delta$ quarter
Deposits from customers	--------	5,457	4,921	$+535$
Loans (net)	--------	2,549	2,401	$+148$
Assets under management	.	1,284	1,620	$-336$
Customers, thous.	.	488	490	$-2$
Fin. intermediaries' payments, thous. pcs	.	5,926	6,054	$-127$
Key figures	9 quarters	$Q3-21$	$Q2 - 21$	$\Delta$ quarter
Cost / income ratio (C/I)	. . .	42.2%	54.6%	$-12.3$ pp
pre-tax ROE*	a sa sa Banta	28.4%	24.0%	$+4.4$ pp
ROE*	a sa sa Balan	24.3%	19.7%	$+4.5$ pp

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Net profit ahead of financial plan by +1.7 EURm

Financial results, EURt	13 months	$Sep-21$	YTD21	YTD 20		FP YTD A YTD FP
Total revenue, incl.		12,628	97,702	68,098	96,926	$+776$
Net interest income		9,056	69,156	48,599	69,576	$-420$
Net fee and commission income		3,275	27,284	19,168	26,343	$+941$
Total operating expenses		6,449	46,936	32,548	46,293	$+643$
Earnings before impairment		6,179	50,766	35,550	50,633	$+133$
Impairment losses on loans		$-603$	2,254	8,655	4,009	$-1,756$
Income tax		1,050	7,591	5,086	7,360	$+231$
Net profit, incl.		5,731	40,921	21,808	39,264	$+1,658$
attr. to shareholders		5,421	39,405	20,111	37,945	$+1,460$
Business volumes, EURm	13 months	$Sep-21$	YTD21	YTD20		FP YTD A YTD FP
Deposits from customers		5,457	5,457	3,215	5,044	$+413$
Loans (net)		2,549	2,549	1,856	2,481	$+68$
Assets under management		1,284	1,284	1,496	1,323	-39
Fin. intermediaries' payments, thous. pcs		2,136	18,005	10,576	na	na
Key figures	13 months	$Sep-21$	YTD21	YTD20	FP YTD	Δ YTD FP
Cost / income ratio (C/I)		51.1%	48.0%	47.8%	47.8%	$+0.3$ pp
Net interest margin (NIM)		1.8%	1.6%	2.0%	1.6%	$-0.0$ pp
pre-tax ROE*		29.2%	24.5%	15.4%	23.6%	$+0.9$ pp
ROE*		24.6%	20.7%	12.8%	20.0%	$+0.7$ pp
ROA		1.1%	0.9%	0.9%	0.9%	$+0.0$ pp

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Strong quarterly growth

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High customer activity and very good quality of loan portfolio

Financial results, EURt	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Net interest income	--------	25,271	23,313	$+1,959$
Net fee and commission income	--------	7,461	6,814	$+647$
Other income	ت بن ∎ با ب	226	226	$+1$
Total revenue	. .	32,959	30,352	$+2,607$
Total expenses	.	11,690	11,931	$-241$
Earnings before impairment	----- ---	21,269	18,421	$+2,848$
Impairment losses on loans	بالمسائلات	1,444	-791	$+2,235$
Income tax expense	.	2,713	2,680	$+33$
Net income	------ -------------------------------	17,112	16,532	$+580$
Business volumes, EURm	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Deposits from customers	. .	5,476	4,947	$+529$
Loans (net)	-------	2,549	2,401	$+148$
Customers, thous.		321	307	$+14$
Key figures	9 quarters	$Q3-21$	$Q2-21$	$\Delta$ quarter
Cost / income ratio (C/I)	.	35.5%	39.3%	$-3.8$ pp
pre-tax ROE*	. .	31.5%	33.0%	$-1.6$ pp
ROE*	.	27.1%	28.4%	$-1.3$ pp
Net interest margin	n i born e s	1.6%	1.6%	$+0.0$ pp

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Net profit ahead of financial plan by +2 EURm

Financial results, EURt	13 months	$Sep-21$	YTD21	YTD 20	FP YTD	Δ YTD FP
Total revenue, incl.		12,040	89,996	61,301	89,285	$+711$
Net interest income		9,108	69,340	48,626	69,838	$-497$
Net fee and commission income		2,764	20,640	12,666	19,579	$+1,061$
Total operating expenses		5,027	35,069	27,008	34,861	$+208$
Earnings before impairment		7,013	54,927	34,294	54,423	$+503$
Impairment losses on loans		$-603$	2,254	8,655	4,009	$-1,756$
Income tax		1,015	7,268	4,040	7,007	$+260$
Net profit		6,601	45,406	21,598	43,407	$+1,998$
Business volumes, EURm	13 months	$Sep-21$	YTD21	YTD 20	FP YTD	Δ YTD FP
Deposits from customers		5,476	5,476	3,257	5,064	$+412$
Loans (net)		2,549	2,549	1,856	2,481	$+68$
Key figures	13 months	$Sep-21$	YTD21	YTD20	FP YTD	Δ YTD FP
Cost / income ratio (C/I)		41.7%	39.0%	44.1%	39.0%	$-0.1$ pp
Net interest margin (NIM)		1.8%	1.6%	1.9%	1.6%	$-0.0$ pp
T1 capital adequacy		14.6%	14.6%	14.8%	15.1%	$-0.5$ pp
Total capital adequacy		17.4%	17.4%	18.7%	18.1%	$-0.7$ pp

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Negative impact of pension reform more modest than expected

Pillar II comparable pension funds NAV change (YTD)

Passive funds and pension fund Roheline NAV change YTD

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Quarterly profit amounted to 0.6 EURm

Financial results, EURt	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Total revenue	. 8	2,215	2,310	$-95$
Total expenses	------- - -	1,699	4,784	$-3,085$
EBIT	____ __ __	515	$-2,474$	$+2,990$
Net financial income	__ _ U_____	50	179	$-129$
Income tax expense	п ш	$\Omega$	$\Omega$	$+0$
Net profit	_____ n_ __	565	$-2,296$	$+2,861$
Business volumes	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Pillar II pension funds	.	1,237	1,575	$-338$
Pillar III pension funds	.	41	39	$+2$
Eurofunds	. . .	6	6	$+0$
Active customers of PII funds, th.	.	139	175	$-36$
Key figures	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Cost / income ratio (C/I)	---------	75.0%		192.3% - 117.2 pp
pre-tax ROE	____ N_ _	9.3%		$-36.6\% + 45.9$ pp
ROE	مرود المسمد	9.3%		$-36.6\% + 45.9$ pp

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Results largely in line with financial plan

Financial results, EURt	13 months	$Sep-21$	YTD 21	YTD 20	FP YTD	YTD FP
Total revenue		533	7,173	6,809	7,154	$+20$
Total expenses		659	8,238	4,703	8,267	$-29$
Earnings before taxes		$-126$	$-1,065$	2,105	$-1,113$	$+49$
Income tax		$\Omega$	1,241	844	1,241	$+0$
Net profit		$-126$	$-2,306$	1,261	$-2,355$	$+49$
Business volumes	13 months	$Sep-21$	YTD 21	YTD 20	FP YTD	YTD FP $\Lambda$
Assets under management, EURm		1,284	1,284	1,496	1,323	$-39$
Active customers of PII funds, thous.		139	139	177	140	-1
Key figures	13 months	$Sep-21$	YTD 21	YTD 20	FP YTD	YTD FP
Cost / income ratio (C/I)		123.7%	114.8%	72.3%	115.6%	$-0.7$ pp

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Expanding product selection and increasing number of partners

Financial results, EURt	9 quarters	$Q3-21$	$Q2 - 21$	$\Delta$ quarter
Total revenue	. De	344	417	-73
Total expenses	.	566	530	$+37$
Net technical result	- 11 - 1	$-222$	$-112$	$-110$
Net investments income	___	O	O	$+0$
Net profit	-----	-222	$-112$	$-110$
Business volumes	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Gross written premium, EURt	l I I	1,412	1,640	$-228$
No of Customers (thous.)	- 11	139	128	$+11$
Key figures	9 quarters	$Q3 - 21$	$Q2 - 21$	$\Delta$ quarter
Net loss ratio	. e L	46.5%	19.5%	+ 27.0 pp
Net expense ratio	L.,	84.9%	101.9%	$-17.0$ pp
pre-tax ROE		$-12.7%$	$-6.3\%$	$-6.4$ pp
ROE		$-12.8%$	$-6.3%$	$-6.5$ pp

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Record sales volumes of appliance insurances, customer satisfaction remains high

Financial results, EURt	13 months	$Sep-21$	YTD21	YTD20	FP YTD	YTD FP Λ
Total revenue, incl.		125	851	0	845	$+6$
Net earned premiums		258	1,323	0	1,345	$-22$
Net incurred losses		119	433	0	391	$+42$
Total expenses		218	1,461	289	1,411	$+49$
Earnings before taxes		$-93$	$-610$	$-289$	$-566$	$-44$
Net profit		$-93$	$-610$	$-289$	$-566$	$-44$
Business volumes	13 months	$Sep-21$	YTD21	YTD20	FP YTD	YTD FP Δ
Gross written premium, EURt		499	5,188	0	5,435	$-247$
No of Customers (thous.)		139	139	0	na	na
Key figures	13 months	$Sep-21$	YTD21	YTD20	FP YTD	Δ YTD FP
Net loss ratio		46.1%	32.7%	na	29.0%	$+3.7$ pp

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Annexes

Liquidity and capitalization strong as planned

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Strong quality of portfolio

LHV Finance loans overdue porfolio Retail banking loans overdue portfolio

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Stock information

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Madis Toomsalu madis.toomsalu@lhv.ee

Meelis Paakspuu meelis.paakspuu@lhv.ee