LHV Group — Interim / Quarterly Report 2024

Feb 11, 2025

LHV Group

Strong business volume growth combined with improving efficiency

Business volumes at a historically highest level

Financial results, EURt	9 quarters	Q4-24	Q3-24	Δ quarter
Net interest income	==============================================================================================================================================================================	66,556	67,426	-870
Net fee and commission income		17,323	14,630	+2,693
Other income		1,041	1,510	-469
Total net income		84,920	83,566	+1,353
Total operating expenses		40,783	35,911	+4,872
Earnings before impairment		44.137	47.655	-3,519
Impairment losses	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	1,085	7,277	-6,192
Income tax expense	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	6,733	5,681	+1,053
Net profit		36,319	34,698	+1,621
Business volumes, EURm	9 quarters	Q4-24	Q3-24	△ quarter
Loans portfolio (net)		4,552	4,126	+426
Deposits from customers		6,910	6,286	+624
Assets under management		1,558	1,521	+37
No of customers, thous.		613	603	+10
Fin. intermediaries' payments, thous. pcs		19,829	18,791	+1,038
Key figures	9 quarters	Q4-24	Q3-24	Δ quarter
Cost / income ratio (C/I)		48.0%	43.0%	+ 5.1 pp
Net interest margin (NIM)		3.2%	3.6%	- 0.4 pp
pre-tax ROE*		26.1%	26.1%	- 0.0 pp
ROE*		22.0%	22.4%	- 0.5 pp

• •
• •
• •
• •

Financial plan met

Financial results, EURt	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Total net income, incl.		32,240	338,299	310.457	344.035	-5,736
Net interest income		23,588	273,326	253,819	279,333	-6,007
Net fee and commission income		7,526	60,301	50,835	61,150	-848
Total operating expenses		16,571	146,920	134,321	145,540	+1,380
Earnings before impairment		15,669	191,379	176,136	198,495	-7,115
Impairment losses		-3.486	16,256	11,539	23,676	-7,421
Income tax expense		3,299	24,820	23,659	24,515	+305
Net profit, incl.		15,856	150,304	140,938	150,304	+0
attr. to shareholders		15,532	148,969	139,601	149,372	-402
Business volumes, EURm	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Loans (net)		4,552	4.552	3,562	4,343	+209
Deposits from customers		6.910	6,910	5,731	6,667	+243
Assets under management		1,558	1,558	1,519	1,573	-15
Fin. intermediaries' payments, thous. pcs		7,086	74,756	49,454	70,270	+4,486
Key figures	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Cost / income ratio (C/I)		51.4%	43.4%	43.3%	42.3%	+ 1.1 pp
Net interest margin (NIM)		3.3%	3.5%	3.9%	3.7%	- 0.2 pp
pre-tax ROE*		33.5%	28.5%	34.0%	28.6%	- 0.2 pp
ROE*		27.7%	24.5%	29.0%	24.6%	- 0.2 pp

• •
• •
• •
• •

Strong growth in business volumes continued

• •
• •
• •
• •

High activity of the customers and historically highest business volumes

Financial results, EURt	9 quarters	Q4-24	Q3-24	△ quarter
Net interest income		56.751	59,990	-3,238
Net fee and commission income		11,600	8,740	+2,859
Other income		433	1,033	-600
Total net income		68,784	69,763	-979
Total operating expenses		26,513	22,832	43,681
Earnings before impairment		42,271	46.931	-4,660
Impairment losses	----------	1.019	7.093	-6.074
Income tax expense	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	6.460	5.740	+720
Net profit		34,792	34,098	+694
Business volumes, EURm	9 quarters	Q4-24	Q3-24	△ quarter
Loans (net)		4.204	3.904	+300
Deposits from customers		6,294	5,716	+5/7
incl. banking services' deposits		1,355	905	+450
No of customers, thous.		456	445	+11
Key figures	9 quarters	Q4-24	Q3-24	△ quarter
Cost / income ratio (C/I)		38.5%	32.7%	+ 5.8 pp
Net interest margin (NIM)		3.0%	3.5%	- 0.4 pp
pre-tax ROE*		28.3%	29.4%	- 1.1 pp
ROF*		23.9%	25.2%	- 1.3 pp

• •
• •
• •
• •

Financial plan targets met

Financial results, EURt	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Total net income, incl.		26,213	276,113	260,077	280,432	-4,319
Net interest income		19,917	237,050	228,470	242,950	-5,901
Net fee and commission income		5,514	36.443	27,217	34.757	+1,686
Total operating expenses		10,587	95,374	85,235	94,722	+651
Earnings before impairment		15,626	180,739	174,841	185,710	-4,971
Impairment losses		-3,354	15,777	11,372	23,056	-7,279
Income tax expense		3,259	24,443	22,107	23,507	+936
Net profit		15,722	140,519	141,363	139,147	+1,372
Business volumes, EURm	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Loans (net)		4,204	4,204	3,549	4,044	+159
Deposits from customers		6,294	6,294	5,535	6,152	+141
incl. banking services' deposits		1,355	1,355	991	1,125	+230
Key figures	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Cost / income ratio (C/I)		40.4%	34.5%	32.8%	33.8%	+ 0.8 pp
Net interest margin (NIM)		3.0%	3.2%	3.6%	3.4%	- 0.2 pp
T1 capital adequacy		17.2%	17.2%	19.8%	17.4%	- 0.2 pp
Total capital adequacy		19.9%	19.9%	22.2%	19.5%	+ 0.4 pp

• •
• •
• •

Loan portfolio grew by over 50% for the second consecutive quarter

•

• •
• •

Retail banking mobile app open for first customers

Financial results, EURt	9 quarters	Q4-24	Q3-24	△ quarter
Total net income, incl.		11,731	9,374	+2,357
Net interest income	------------------------------------------------------------------------------------------------	9,079	7,211	+1,867
Net fee and commission income	-------------------	2,144	2,230	-86
Other net income		509	-67	+576
Total operating expenses		10,893	9,992	+901
Earnings before impairment		838	-618	+1,456
Impairment losses	-----------	66	184	-119
Income tax expense		132	-201	+333
Net profit		640	-602	+1,242
Business volumes, EURm		Q4-24	Q3-24	△ quarter
Deposits from customers	-------	705	635	+70
Loans (net)		348	223	+126
Key figures		Q4-24	Q3-24	△ quarter
Cost / income ratio (C/I)		92.9%	106.6%	- 13.7 pp
Net interest margin (NIM)		4.8%	4.6%	+ 0.2 pp
pre-tax ROE		3.6%	-3.8%	+ 7.4 pp
ROE		3.0%	-2.9%	+ 5.9 pp

• •
• •
• •
• •

Loan and deposit volumes significantly higher than planned

Financial results, EURt	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Total net income, incl.		4,703	44,625	36,755	45,602	-977
Net interest income		3,400	34.715	28,917	34.954	-239
Net fee and commission income		781	9.378	7,807	10,600	-1,222
Other net income		522	532	30	48	+484
Total operating expenses		4,619	39,095	31,300	37,651	+1,444
Earnings before impairment		84	5,529	5,455	7,951	-2,421
Impairment losses		-132	479	176	621	-142
Income tax expense		-7	-794	0	-163	-631
Net profit		223	5,845	5,279	7,493	-1,649
Business volumes, EURm	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Deposits from customers		705	705	239	588	+117
Loans (net)		348	348	79	299	+50
Key figures	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Cost / income ratio (C/I)		98.2%	87.6%	85.2%	82.6%	+ 5.0 pp
Net interest margin (NIM)		5.4%	6.1%	14.7%	6.8%	- 0.7 pp
I 1 capital adequacy		22.5%	22.5%	na	25.6%	- 3.1 pp
Total capital adequacy		22.5%	22.5%	na	25.6%	- 3.1 pp

• •
• •
• •

Stock markets had a strong quarter, led by technology stocks and the U.S. market

Index funds and pension fund Roheline NAV change YTD

•

•

• •
• •

-6%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

LHV L Luminor 50-56 SEB 55+ Swedbank 1970-79

Pillar II comparable pension funds NAV change YTD

0%

6%

12%

18%

Quarterly net profit 0.5 EURm

Financial results, EURt	9 quarters	Q4-24 Q3-24		△ quarter
Total net income		2,262	2,251	+11
Total operating expenses		1,799	1,781	+18
EBIT		464	470	-7
Net financial income		45	113	-68
Net profit	---------------	509	ર્ રજૂરે	-75
Business volumes, EURm	9 quarters	Q4-24	Q3-24	△ quarter
Pillar II pension funds		1.442	1.413	+29
Pillar III pension funds		109	100	+9
Key figures	9 quarters	Q4-24	Q3-24	△ quarter
Cost / income ratio (C/I)		78.0%	75.3%	+ 2.6 pp
pre-tax ROE	-----	10.3%	12.3%	2.0 pp
ROE	==============================================================================================================================================================================	10.3%	12.3%	2.0 pp

• •
• •
• •
• •

Net profit exceeded the financial plan

Financial results, EURt	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Total net income		765	8,936	8,845	8,944	-8
Total operating expenses		673	7,079	6,997	7,321	-242
EBIT		91	1,857	1,848	1,623	+234
Net financial income		-47	559	292	640	-81
Income tax expense		0	801	488	801	+0
Net profit		44	1,616	1,652	1,462	+153
Business volumes	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Assets under management, EURm		1,558	1,558	1,519	1,573	-15
Active customers of PII funds, thous.		114	114	123	115	-0
Key figures	13 months	Dec 24	YTD24	YTD23	FP YTD	A YTD FP
Cost / income ratio (C/I)		93.9%	74.6%	76.6%	76.4%	1.8 pp
Funds average return		-0.9%	8.7%	6.4%	7.7%	+ 1.0 pp

- •

•

•

A quarter with strong sales results

• •
• •
• •

Negative impact of expenses on profitability

Financial results, EURt	9 quarters	Q4-24	Q3-24	△ quarter
Insurance service revenue	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	9,429	8,930	+499
Commissions expense		1,236	1,168	+67
Gross incurred losses		6,529	5,878	+650
Operating expenses		1.460	1,220	+240
Insurance result without reinsurance	--------------	204	663	-459
Reinsurance result		155	306	-151
Total result from insurance activities	--------	49	357	-309
Net other income		19	95	-76
Net profit	------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	68	452	-385
Business volumes, EURt	9 quarters	Q4-24	Q3-24	△ quarter
Contract premiums written		9,821	8.452	+1,370
No of customers (thous.)		170	169	+1
Key figures	9 quarters	Q4-24	Q3-24	△ quarter
Net loss ratio		68.7%	66.6%	+ 2.0 pp
Net expense ratio		32.0%	29.0%	+ 3.1 pp
pre-tax ROE	= = = = = = = =	4.2%	29.3%	- 25.1 pp
ROE		4.2%	29.3%	25.1 pp

• •
• •
• •
• •

The number of newly signed contracts is increasing

Financial results, EURt	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Insurance service revenue		3,261	34,969	26,038	33,732	+1,237
Commissions expense		429	4,542	3,068	4,091	+451
Gross incurred losses		2,333	23,118	16,946	21,799	+1,319
Operating expenses		543	5,375	4,766	5,363	+13
Insurance result without reinsurance		-45	1,934	1,258	2,479	-546
Reinsurance result		67	962	1,018	1,434	-471
Total result from insurance activities		-112	971	240	1,046	-75
Net other income		-36	226	64	-21	+248
Net profit		-148	1,198	305	1,025	+173
Business volumes, EURt	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Contract premiums written		3,028	38,025	31,412	36,607	+1,418
No of customers (thous.)		170	170	161	na	na
Key figures	13 months	Dec 24	YTD24	YTD23		FP YTD A YTD FP
Net loss ratio		71.4%	66.5%	66.8%	66.3%	+ 0.2 pp
Net expense ratio		35.5%	31.1%	32.2%	31.2%	0.1 pp

• •
• •
• •

12 months

Risks and capitalisation

Capitalisation

Capital ratios and minimum requirements as of December 2024

• •
• •
• •
• •
• •

Loan portfolio quality

•

•

• •

Liquidity and funding

Loans-to-deposits ratio LCR and NSFR

• •
• •

•

•

- •

Madis Toomsalu madis.toomsalu@lhv.ee

Meelis Paakspuu meelis.paakspuu@lhv.ee