LHV Group's Financial Highlights: 2024 Overview
The past year has proven to be exceptionally successful for LHV Group, characterized by robust loan issuance and an increase in deposit collection, culminating in achieving their profit targets as set out in their financial plan.
Funding and Revenue Growth
In 2024, AS LHV Group achieved a net revenue of €338.3 million, marking an 11% rise compared to the previous year, primarily driven by the impressive growth across multiple business sectors. The annual net interest income rose to €273.3 million, reflecting an 8% increase, while net fee and commission income surged by 24% to €60.3 million. LHV's consolidated expenditures for the year reached €146.9 million, which is a 14% increase from last year. Ultimately, the consolidated net profit for LHV Group was €150.3 million, up €9.4 million or 7% from 2023.
Subsidiary Performance
Among the subsidiaries, AS LHV Pank led the way with a net profit of €140.5 million in 2024. Other subsidiaries including UK Bank Limited, AS LHV Varahaldus, and AS LHV Kindlustus posted net profits of €5.8 million, €1.6 million, and €1.2 million respectively.
Asset and Loan Portfolio Growth
By the close of 2024, LHV Group's total consolidated assets swelled by 23% year-on-year to €8.74 billion, an increase of €1.64 billion. In the fourth quarter alone, assets rose by 12%. Furthermore, the consolidated loan portfolio expanded by €990 million to reach €4.55 billion, reflecting a significant growth of 28%. The fourth quarter also saw a 10% increase—an addition of €426 million—fueled by both corporate loans, which rose by €328 million, and retail loans that increased by €98 million.
Deposits and Managed Funds
Consolidated deposits showcased considerable growth, up by €1.18 billion from the previous year, now totaling €6.91 billion, representing a 21% increase. The fourth quarter contributed an increase of €624 million. The group’s total managed funds rose by €39 million over the year to €1.56 billion.
Client Activity and Operational Success
In 2024, the number of processed payments in relation to clients acting as financial intermediaries reached an impressive 74.8 million, a 51% increase compared to the previous year. The quarterly financial results for Q4 illustrated a consolidated net profit of €36.3 million, which was €1.6 million more than Q3, demonstrating continuous growth and improvement in quarterly profit by 11% compared to the same period last year.
Quarterly Revenue Insights
In Q4, LHV Group's consolidated net income increased by 2% from the previous quarter to €84.9 million, with net interest income generated at €66.6 million and net fee and commission income at €17.3 million. The consolidated operating expenses climbed to €40.8 million, reflecting a 14% increase from Q3.
Market Position and Client Growth
LHV Group's client base continued to expand, with the number of LHV Pank clients increasing by 10,900 to 455,000 in Q4 alone. Over the year, LHV Pank gained 38,000 new clients, surpassing a 9% growth benchmark. The active utilization of banking services surged, with increasing demand for investment banking facilitating fee income, which has compensated for the pressures on interest income.
Strategic Developments and Investments
In response to evolving market conditions, LHV Pank has focused on cost-efficiency measures, resulting in a workforce reduction of 44 employees. The loan issuance saw a rapid rise towards year-end, particularly in Q4, with a notable increase in the loan portfolio by €300 million. Strong quality metrics of the loan portfolio contributed to a decrease in necessary write-downs.
Acknowledgment and Future Prospects
In recognition of its achievements, LHV was honored as the best bank in Estonia by The Banker magazine. The quarterly performance also underscored LHV's commitment to meaningful projects, as the group will act as the major sponsor for prominent sports events in Estonia.
LHV Bank in the UK exhibited extraordinary growth, with a loan portfolio escalation of 126 million euros noted for the second consecutive quarter. The institution aims to enhance its offerings and refine its mobile banking solutions, aiming to draw in more retail clients.
As LHV Varahaldus concluded the year with 114,000 active clients contributing monthly, the performance was seen as robust. The group's annual cost/income ratio was recorded at an impressive 43.4%, complemented by a return on equity of 24.5%—signifying LHV Group's strong liquidity and capitalization.
Frequently Asked Questions
1. What financial highlights did LHV Group achieve in 2024?
LHV Group reported net revenue of €338.3 million and a consolidated net profit of €150.3 million, marking significant growth from the prior year.
2. How did LHV manage its loan portfolio?
The loan portfolio grew to €4.55 billion in 2024, a rise of 28%. The bank focused on maintaining high quality within its loans, leading to reduced write-downs.
3. What recognition did LHV Group receive recently?
In December, LHV Group was recognized as the best bank in Estonia by The Banker magazine.
4. How has client activity changed for LHV Pank?
LHV Pank saw a year-over-year increase of 38,000 clients, highlighting a robust demand for banking services.
5. What future plans does LHV Group have?
LHV Group aimed to publish its 2025 financial plan and five-year forecast, with particular focus on efficiency and service enhancement.
