LHV Group Sees Strong Growth in April Financial Performance
April was an impressive month for LHV Group, marked by remarkable results and a significant increase in deposits. Throughout the month, the consolidated loan portfolio of the company grew by EUR 77 million, while the total deposit amount surged by EUR 727 million. Despite a slight decrease of EUR 4 million in managed funds, LHV maintained a robust footing in the financial landscape, with payments related to financial intermediaries totaling 6.5 million euros.
Net Profit and Shareholder Returns
In terms of profitability, LHV Group recorded an impressive net profit of EUR 10.8 million for April. Breaking it down by subsidiary, AS LHV Pank contributed a substantial EUR 10.1 million to this figure, with LHV Bank Ltd making EUR 83 thousand, AS LHV Kindlustus contributing EUR 319 thousand, and AS LHV Varahaldus adding EUR 68 thousand. The return on equity attributable to shareholders stood at a robust 19.1%, demonstrating the financial strength of the group.
Customer Growth and Deposit Trends
The customer base of LHV Pank expanded significantly in April, adding 2,800 new customers. The bank's loan portfolio itself saw a healthy growth of EUR 53 million. The influx of deposits was also noteworthy, with a total increase of EUR 574 million; this growth was driven largely by retail customers, who accounted for EUR 41 million, alongside EUR 212 million from corporate clients, which included temporary deposits. Additionally, platform deposits increased notably by EUR 120 million. However, as the banking sector faced a decline in interest income due to decreasing Euribor rates, credit quality remained high, paving the way for potential reductions in impairments.
Recognitions and Ratings
Noteworthy developments included a boost in LHV Pank’s standing, as Moody's Ratings elevated its covered bond programme and bond ratings to the esteemed Aaa level. LHV also garnered recognition in the annual CV-Online survey as one of the top employers within the financial sector for the fifth year in a row, ranking second in the overall top-of-mind assessment.
Progress in LHV Bank and Insurance Operations
LHV Bank, operating in the UK, continued to experience rapid growth, with its loan portfolio increasing by EUR 24 million and platform deposits rising by EUR 130 million over the month. This growth sets a solid foundation for an upcoming campaign aimed at direct deposit gathering. The bank did encounter increased marketing expenses related to a new retail banking initiative, but it also successfully boosted its equity capital by EUR 12 million through the issuance of subordinated bonds.
On the insurance front, LHV Kindlustus made strides by signing new contracts totaling EUR 3.7 million in April, despite paying out EUR 2.1 million in claims for 12,800 new registrations. This performance kept the loss ratio for major insurance products within a favorable range, reflecting the entity's commitment to profitability.
Pension Fund Performance
Regarding LHV Varahaldus, the profitability aligned with the financial plan despite a challenging stock market scenario. The pension funds managed by LHV preserved their value well, with larger funds, L and XL, experiencing minimal declines of 0.4% and 0.3%, respectively. In contrast, index funds like LHV Pensionifond Indeks faced a tougher month, dropping by 4.1%.
Capital and Credit Ratings Stability
April culminated with AS LHV Group successfully issuing EUR 50 million in Tier 1 capital, ensuring adequate capitalization for sustained growth and enabling the repurchase of AT1 bonds issued five years prior. Moody’s Investors Service kept LHV Group’s credit ratings steady, maintaining a long-term issuer rating of Baa3 with a positive outlook, further underpinning the group’s financial stability.
LHV Group proudly stands as the leading domestic financial conglomerate in Estonia. With key subsidiaries including LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited, the group employs over 1,150 individuals. By the end of April, LHV services an impressive 468,000 banking clients, manages pension funds for 113,000 active customers, and provides insurance coverage to 176,000 clients. LHV Bank Limited, a proud subsidiary of the group, holds a banking licence in the UK, offering comprehensive banking services to fintech companies and funding for small to medium enterprises.
Priit Rum
Communications Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee
Frequently Asked Questions
What was LHV Group's net profit for April?
LHV Group earned a net profit of EUR 10.8 million in April.
How much did LHV Pank's loan portfolio grow?
The loan portfolio of LHV Pank grew by EUR 53 million during the month.
What recognition did LHV receive in the financial sector?
LHV was recognized as one of the leading employers in the financial sector for the fifth consecutive year.
What was LHV Kindlustus's insurance contract total in April?
LHV Kindlustus signed new insurance contracts amounting to EUR 3.7 million in April.
What is LHV Group's long-term issuer rating?
As of April, LHV Group holds a long-term issuer rating of Baa3 with a positive outlook.
