April for LHV was characterised by increased interest income and our insurance business becoming profitable, but also by strong competition on the banking market and uncertainty about future developments of the economic environment.
The consolidated deposits of AS LHV Group decreased by EUR 70 million in April, due to a decline in deposits from payment intermediaries. The deposits of retail clients increased by EUR 59 million. The consolidated loan portfolio grew by EUR 18 million over the month, with corporate loans increasing by EUR 13 million and retail loans by EUR 5 million. The volume of the funds managed by LHV grew by EUR 7 million in April. In April, 3.5 million payments from financial intermediary clients were processed.
In April, the consolidated net profit of LHV Group amounted to EUR 12.0 million. AS LHV Pank earned EUR 11.4 million in net profit. AS LHV Varahaldus generated a loss of EUR 15 thousand. AS LHV Kindlustus became profitable, earning a net profit of EUR 110 thousand, and the net profit of LHV’s UK subsidiary amounted to EUR 0.7 million.
The number of bank clients increased by 3,600 in April, and we can observe some activation of loan clients. While interest income exceeded the plan, the quality of the loan portfolio remained good. In April, LHV introduced a campaign offer for the Green Home Loan, intended for energy-efficient homes, which has helped to increase the proportion of the Green Home Loan among new contracts to 20%. The bank has also focused on deposits, and pays interest similar to the Central Bank interest rate for fixed-term deposits; in April, the bank also increased the interest rate for companies with larger demand deposit amounts. The bank’s expenses were affected by the higher than expected payment rate of the deposit guarantee fund.
For LHV’s UK subsidiary, April went by in preparation of becoming a bank. On 2 May, the company received its banking licence from the UK’s financial supervision authority PRA, enabling the company to go swiftly ahead with its plans for the transfer of business activities. In the future, the company will be operating as a licensed bank under the name LHV Bank Limited. While currently, the clients of LHV Bank include financial intermediaries and SME loan clients, within a year, the company plans to start taking deposits and coming out with offers for e-merchants.
LHV Varahaldus gained 300 new active II pension pillar clients in April. While it was a modest month on the markets, the rate of return of larger funds remained slightly positive. In April, the rate of return for larger funds M, L and XL was 0.4%, 0.1%, and 0.4%, respectively. Pensionifond Indeks decreased by 0.8%, Pensionifond Roheline lost 4.6% in value.
The strong insurance technical result of LHV Kindlustus supported the company in reaching net profit. As at the end of April, LHV Kindlustus already has 221 thousand valid insurance policies and over 158 thousand clients. In April, they concluded 12,600 insurance contracts with a volume of EUR 3.4 million, and loss events were compensated for in the amount of EUR 1.1 million. The improved efficiency indicators support keeping up with the financial plan.
The capitalisation of LHV Group is near its record level and the financial plan stands. At the same time, the visibility of future developments of the economic environment is below average.
AS LHV Group’s reports are available at: https://investor.lhv.ee/en/reports/.
LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, and LHV Kindlustus. The Group’s companies employ more than 930 people. As at the end of April, LHV’s banking services are being used by 394,000 clients, the pension funds managed by LHV have 131,000 active clients, and LHV Kindlustus is protecting a total of 158,000 clients. The Group’s subsidiary LHV Bank owns a banking licence in the United Kingdom and offers banking services to international fintech companies and loans to small and medium-sized enterprises.
Priit Rum
Communication Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee
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