LHV Group Reports Strong Growth and Financial Performance

LHV Group's Impressive Quarterly Results

In the second quarter of 2025, LHV Group achieved remarkable financial results, showcasing higher net profits and an expansion in business activities despite a backdrop of decreasing interest rates. The group's loan portfolio surged to an impressive 5 billion euros, reflecting healthy demand in the banking sector.

Profitable Performance Across Subsidiaries

During Q2, LHV Group recorded a net profit of 30.8 million euros, marking an increase of 1.6 million euros from the previous quarter, which represents a 6% growth rate. The return on equity for shareholders reached 17.4% within the same quarter. Notably, all subsidiaries within the group reported profitability. LHV Pank, a key subsidiary, reported a significant net profit of 29.7 million euros, followed by minor contributions from LHV Bank Ltd., LHV Varahaldus, and LHV Kindlustus.

Revenue and Expenditure Insights

Consolidated revenues for LHV Group stood at 73.9 million euros in Q1 2025, which is a decrease of 7% compared to the prior quarter and a 14% fall year-on-year. Breaking down the revenue streams, net interest income contributed 57.6 million euros, while net fee and commission income accounted for 15.6 million euros. However, total expenditures rose by 8% to 40.5 million euros when compared to the previous quarter, reflecting ongoing investments and operational costs.

Financial Position and Asset Growth

By the end of June, LHV Group's consolidated assets rose to 9.38 billion euros, which is a notable increase of 10% from the previous quarter and 28% year-on-year. Specifically, the consolidated loan portfolio expanded by 269 million euros or 6% over the quarter, whereas client deposits increased by 760 million euros, representing a 12% rise. Furthermore, assets under management grew to 1.56 billion euros.

Client Engagement and Service Innovation

The number of clients served by LHV Pank rose by 8,300 during the quarter, while total deposits surged to a new high of 1.02 billion euros. LHV launched LHV Premium, an innovative banking service that combines banking with insurance and travel benefits, catering to the growing demand for integrated financial solutions.

Growth in LHV Bank and Insurance Sector

Meanwhile, LHV Bank, active in the UK market, also reported progress with a loan portfolio increase of 79 million euros, indicating solid demand from small and medium enterprises. Their deposit growth reached 202 million euros, contributing to a remarkable surge in new client acquisition through effective marketing strategies.

Positive Trend in Insurance and Investments

LHV Kindlustus witnessed a robust performance too, with a 78% rise in insurance revenues and a 62% jump in net profits compared to the previous quarter. The year-to-date results indicate that the subsidiary significantly surpassed its financial targets, despite market challenges.

Pension Fund Performance and Strategic Developments

Global market conditions in Q2 positively influenced LHV's pension funds, with all funds reporting a positive yield. Specifically, the higher-risk funds M, L, and XL yielded returns of 1.2%, 1.0%, and 2.8%, respectively. Plans for September include the consolidation of green pension funds to streamline offerings and enhance investment options for clients.

Strategic Capital Movements and Ratings Upgrade

In Q2, LHV Group strengthened its capital position by issuing 50 million euros in AT1 bonds. Enhanced ratings from Moody's Ratings Agency reflect a favorable view of LHV's financial strategies and overall credit standing.

Comments from Leadership

Madis Toomsalu, the Chairman of the Management Board at LHV Group, expressed satisfaction with the group's performance, highlighting substantial loan portfolio growth and strong client demands as major contributing factors to their success. He emphasized ongoing initiatives aimed at sustaining future growth and enhancing client services.

Frequently Asked Questions

What was LHV Group's net profit for Q2 2025?

LHV Group reported a net profit of 30.8 million euros for Q2 2025, marking a 6% increase from the previous quarter.

How has the loan portfolio changed over the recent quarter?

The loan portfolio of LHV Group increased by 269 million euros, reaching a total of 5 billion euros.

What innovative services did LHV introduce?

LHV launched LHV Premium, an integrated banking service combining banking, insurance, and travel services.

How have LHV's pension funds performed?

All LHV pension funds reported positive returns; higher-risk funds returned rates of 1.2%, 1.0%, and 2.8% respectively.

What steps are being taken to improve LHV Bank's capabilities?

LHV Bank issued bonds and increased its share capital to support the growth of its loan portfolio and improve financial capacity.

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