LHV Group — Interim / Quarterly Report 2021

Aug 17, 2021

LHV Group

Financial plan assumptions

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Increase in revenue from high customer activity

Financial results, EURt	Updated FP2021	2020	∆ YoY	Previous FP2021	$\Delta$ upd. FP.
Total revenue, incl.	131,500	103,547	$+27.953$	121,498	$+10,002$
Net interest income	95,100	68.492	$+26,608$	87,955	$+7,145$
Net fee and commission income	34,822	33,351	$+1,471$	30,777	$+4,045$
Other income	1,578	1,704	$-126$	2,766	$-1,188$
Total operating expenses	61,273	1,704	$+59,569$	60,257	$+1,016$
Earnings before impairment	70,227	43,975	$+26,252$	61,241	$+8,987$
Impairment losses on loans	6,357	59,572	$-53,215$	11,914	$-5,557$
Earnings before taxes	63,870	10,898	$+52,972$	49,327	$+14,543$
Income tax expense	10,019	48,674	-38,654	7,578	$+2,442$
Net profit	53,851	8,827	$+45,024$	41,749	$+12,102$
Net profit w/o amortisation from leaving customers	57,306	8,827	$+48,479$	46,160	$+11,145$
Attr. to shareholders	51,801	39,847	$+11.954$	39,465	$+12,336$
Business volumes, EURm	Updated FP2021	2020	Δ ΥοΥ	Previous FP2021	$\Delta$ upd. FP

	FCVAT			IFAVAL
Deposits from customers	5.076	4.120	+956	4.101	$+975$
Loans (net)	2.619	2.209	$+410$	2.604	$+16$
Assets under management	1,354	1.537	-183	1.221	$+132$

Key figures	Updated FP2021	2020	Δ ΥοΥ	Previous FP2021	$\Delta$ upd. FP
Cost / Income ratio (C/I)	46.6%	42.5%	$+4.1$ pp	49.6%	$-3.0$ pp
pre-tax ROE*	23.3%	21.0%	$+2.2$ pp	18.7%	$+4.6$ pp
ROE*	19.6%	17.8%	$+1.8$ pp	15.8%	$+3.8$ pp
T1 capital adequacy	16.1%	15.6%	$+0.5$ pp	14.1%	$+1.9$ pp
Total capital adequacy	20.2%	20.5%	$-0.3$ pp	18.2%	$+2.0$ pp

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Profit growth from increased business volumes

Financial results, EURt	Updated FP2021	2020	Δ ΥοΥ	Previous FP2021	$\Delta$ upd. FP
Total revenue, incl.	121,653	88,519	$+33,134$	111,167	$+10,486$
Net interest income	95,585	69,046	$+26,538$	88,646	$+6,939$
Net fee and commission income	26,118	18,385	$+7,733$	22,178	$+3,940$
Other income	-49	1,088	$-1,137$	343	$-392$
Total operating expenses	46,640	36,268	$+10,372$	45,333	$+1,307$
Earnings before impairment	75,013	52,251	$+22,762$	65,834	$+9,179$
Impairment losses on loans	6,357	10,898	$-4,542$	11,914	$-5,557$
Earnings before taxes	68,656	41,353	$+27,303$	53,920	$+14,736$
Income tax expense	9,532	6,750	$+2,782$	7,578	$+1,954$
Net profit, incl.	59,124	34,603	$+24,521$	46,343	$+12,782$
Attr. to shareholders	56,843	32,514	$+24,329$	44,062	$+12,782$
Business volumes, EURm	Updated FP2021	2020	Δ ΥοΥ	Previous FP2021	$\Delta$ upd. FP
Deposits from customers	5,122	4,141	$+980$	4,118	$+1,004$
Loans (net)	2,619	2,209	$+410$	2,604	$+16$
Key figures	Updated FP2021	2020	Δ ΥοΥ	Previous FP2021	$\Delta$ upd. FP
Cost / Income ratio (C/I)	38.3%	41.0%	$-2.6$ pp	40.8%	$-2.4$ pp
pre-tax ROE*	28.2%	20.5%	$+7.7$ pp	22.5%	$+5.7$ pp
ROE*	24.3%	17.7%	$+6.6$ pp	19.4%	$+4.9$ pp
T1 capital adequacy	15.1%	16.2%	$-1.1$ pp	14.4%	$+0.7$ pp
Total capital adequacy	17.9%	19.7%	$-1.8$ pp	17.5%	$+0.4$ pp

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Less customers leaving II pillar than expected

Financial results, EURt	Updated FP2021	2020	A YoY	Previous FP2021	$\Delta$ upd. FP
Total revenue	9.135	15,578	$-6,443$	8,965	$+170$
Total expenses, incl.	10,043	6,389	$+3,654$	10,933	$-890$
Amortsation from leaving customers	3,455	0	$+3,455$	4,411	$-956$
Earnings before taxes	$-908$	9,189	$-10,097$	$-1,968$	$+1,060$
Income tax expense	1,241	844	$+397$	1,241	$+0$
Net profit	$-2,150$	8,345	$-10,494$	$-3,209$	$+1,060$
Net profit w/o amortisation from leaving customers	1,354	0	$+1.354$	1.221	$+132$

Business volumes	Updated FP2021	2020	∆ YoY	Previous FP2021	$\Delta$ upd. FP
Assets under management, EURm	1,354	1,537	$-183$	1,221	$+132$
Active customers of PII funds, thous.	142	180	$-38$	129	$+13$
Key figures	Updated FP2021	2020	Δ ΥοΥ	Previous FP2021	$\Delta$ upd. FP
Cost / Income ratio (C/I)	109.6%	42.7%	$+66.9$ pp	122.0%	$-12.4$ pp
pre-tax ROE	$-3.4\%$	34.0%	$-37.4$ pp	$-7.3\%$	$+3.9$ pp

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Wide product portfolio launched during the first year in business

Financial results, EURt	Updated	2020	Δ ΥοΥ	Previous	$\Delta$ upd.
	FP2021			FP2021	FP
Total revenue, incl.	1.306	0	$+1,306$	2,134	-828
Total operating expenses	1,966	551	$+1,416$	2,124	$-158$
Earnings before taxes	-660	-551	$-110$	10	$-670$
Income tax expense	0	0	$+0$	0	$-0$
Net profit, incl.	-660	-551	$-110$	10	-670
Attr. to shareholders	$-429$	$-358$	-71	6	-436
Business volumes, EURt	Updated	2020	Δ ΥοΥ	Previous	$\Delta$ upd.
	FP2021			FP2021	FP
Gross premiums	7,318	0	$+7,318$	13,031	$-5,712$
	Updated	2020	Δ ΥοΥ	Previous	$\Delta$ upd.
Key figures	FP2021			FP2021	FP
Cost / Income ratio (C/I)	150.6%	na	na	99.5%	$+51.0$ pp
pre-tax ROE*	$-9.4\%$	$-48.1%$	$+38.8$ pp	$0.1\%$	$-9.5$ pp
ROE*	$-9.4\%$	$-48.1%$	$+38.8$ pp	0.1%	$-9.5$ pp

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2021 forecast

Madis Toomsalu madis.toomsalu@lhv.ee

Meelis Paakspuu meelis.paakspuu@lhv.ee