LHV Group's Financial Performance in November
LHV Group reported impressive results for November, highlighting substantial growth in both profits and business activities. The consolidated loan portfolio experienced a significant increase, rising by EUR 94 million, bringing the total to EUR 5.38 billion. Meanwhile, deposits expanded by EUR 155 million, reaching an impressive total of EUR 7.66 billion. Additionally, the volume of managed funds rose by EUR 14 million to EUR 1.67 billion. Notably, payments related to financial intermediaries amounted to EUR 7.5 million throughout the month.
Strong Earnings and Return on Equity
In November, AS LHV Group achieved a consolidated net profit of EUR 11.9 million. Breaking it down by subsidiaries, AS LHV Pank generated EUR 11.4 million, while LHV Bank Ltd contributed EUR 0.9 million. AS LHV Varahaldus and AS LHV Kindlustus earned EUR 0.2 million and EUR 0.04 million, respectively. The return on equity attributed to shareholders for the month stood at an impressive 19.3%, showcasing the financial group's robust performance.
Customer Growth and Loan Performance
The number of customers at LHV Pank grew by 2,875, bringing the total to 489,000 customers. The loan volume also reflected positive trends, with an increase of EUR 40 million as the loan portfolio reached EUR 4.65 billion. Specifically, the private individuals' loan portfolio rose by EUR 22 million, while the corporate segment saw an increase of EUR 18 million. The quality of the loan portfolio remains strong, highlighted by a decrease in loan impairments of EUR 3.7 million compared to the previous month. Furthermore, deposits increased by EUR 35 million to reach EUR 6.64 billion, with term deposits soaring by EUR 71 million.
International Growth in the UK Market
LHV Bank in the UK also experienced significant growth in November. The loan volume surged by EUR 55 million, resulting in a total loan portfolio of EUR 728 million at month-end. The credit committee approved EUR 144 million in loans that have yet to be disbursed. The deposit levels increased by EUR 119 million, elevating total deposits to EUR 1.20 billion during the month. Additionally, there were new Easy Access deposits introduced to the mobile banking platform, supported by a broader marketing campaign intended to attract more retail customers.
Funds Performance and Market Conditions
The financial markets in November were calmer compared to October, which reflected in the performance of LHV funds. The largest funds managed by LHV Varahaldus, known as Ettevõtlik and Julge, recorded increases of 0.6% and 0.3%, respectively. Additionally, the funds Tasakaalukas and Rahulik achieved returns of 0.4%. However, LHV Pensionifond Indeks saw a rise of 0.9% during the month. Despite modest sales performance leading to slightly lower-than-expected fund volumes, LHV’s actively managed pension funds have performed best over the past year.
Insurance Sector Developments
In the insurance domain, LHV Kindlustus secured new contracts totaling EUR 3.3 million in November. By the end of the month, approximately 298,000 insurance contracts were active. Reimbursements for loss events amounted to EUR 2.3 million, with 12,700 incidents reported. Despite a higher-than-average net expense ratio of 30.7%, attributed to the sales campaign costs, the campaign resulted in substantial growth in both motor own damage insurance and motor third-party liability insurance.
Year-to-Date Financial Overview
Year-to-date, LHV Group reported a net income that is short of the financial plan by EUR 8.7 million, which translates to approximately 3%. In terms of net profit, the deficit from the financial plan was EUR 5.9 million, equating to roughly 5%. However, the loan portfolio still exceeds the financial plan projections by EUR 114 million, while deposits surpass by EUR 168 million, showing a positive trajectory overall.
Contact Information for Investors
LHV Group stands as the largest domestic financial group and capital provider in Estonia. Its key subsidiaries include LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited, employing around 1,200 individuals. As of November, LHV Pank services 489,000 customers, managing pension funds for 106,000 active clients, and LHV Kindlustus provides protection for approximately 230,000 customers. Notably, LHV Bank operates in the UK, offering services to financial technology companies alongside loans to SMEs and retail banking.
Frequently Asked Questions
What influenced LHV Group's increased profits in November?
LHV Group's profits increased due to a rise in business volumes and strong performance in both the banking and insurance sectors.
How did customer numbers change for LHV Pank?
In November, LHV Pank gained an additional 2,875 customers, reaching a total of 489,000.
What are the key performance indicators for LHV's loan portfolio?
The loan portfolio increased by EUR 40 million, with a strong quality noted through decreased impairments on loans and bonds.
Did LHV report any challenges in its financial results?
Yes, LHV's net income for the year to date was below financial plans, primarily due to lower-than-expected sales during the month.
What is the focus of LHV Bank's growth strategy in the UK?
LHV Bank aims to expand its retail customer base through marketing campaigns and the introduction of new deposit products.
