August was characterised by growth in business volumes, loans, and deposits. LHV Group's consolidated loan portfolio grew in the monthly comparison by EUR 165 million, reaching EUR 5.2 billion. The volume of deposits grew by EUR 91 million, reaching EUR 7.72 billion. The volume of the funds managed by LHV increased by EUR 31 million, reaching EUR 1.63 billion. Payments related to financial intermediaries amounted to EUR 6.96 million in August.
In the same month, AS LHV Group earned EUR 7.9 million in consolidated net profit. Net profit was earned by all subsidiaries. With regard to subsidiaries, AS LHV Pank earned EUR 7.4 million, LHV Bank Ltd EUR 0.1 million, AS LHV Kindlustus EUR 0.2 million, and AS LHV Varahaldus EUR 0.3 million. The return on equity attributable to shareholders in August was 12.7%.
The number of LHV Pank clients grew by 2,900 in August, reaching a total of 479,000. The company's loan and deposit volumes hit record highs in August. LHV Pank's loan volumes grew by EUR 108 million, and the volume of the loan portfolio reached EUR 4.55 billion. The retail loan portfolio grew by EUR 23 million, and the corporate loan portfolio by EUR 85 million. The quality of the entire loan portfolio remains strong. The volume of deposits increased by EUR 105 million, reaching EUR 6.89 billion. Interest rates on deposits are falling more slowly than on loans; therefore, net interest income is lower than planned. Costs remain as planned.
Operating in the United Kingdom, LHV Bank continued to grow its business volumes in August. Loan volumes increased by EUR 56 million, and the loan portfolio reached EUR 642 million as at the end of August. More than 400 clients opened an account, and the volume of direct deposits grew by EUR 13 million to EUR 33 million. In order to reach an optimal loan-to-deposit ratio, deposits decreased in the monthly comparison by EUR 18 million, and the total volume of deposits reached EUR 1.04 billion. The development of services continues, with both direct debits and Easy Access deposits in the pipeline.
LHV Kindlustus signed new insurance contracts in the amount of EUR 2.6 million in August. As at the end of August, there are approximately 287,000 valid insurance contracts. Loss events were compensated in the amount of EUR 2.3 million, with 9,700 new loss events registered. The profitability and capital needs of LHV Kindlustus are outperforming the financial plan.
The funds of LHV Varahaldus demonstrated a good rate of return in August. The larger funds, Ettevõlik and Julge, rose during the month by 1.6% and 1.5%, respectively. The rate of return of the funds Tasakaalukas and Rahulik were 1% and 0.4%, respectively. LHV Pension Fund Index declined 0.2% during the month. Index funds were negatively affected by the weakening of USD against euro. The volume of the LHV Varahaldus funds, the number of customers, and net profit is slightly down.
LHV Group's financial plan remains unchanged. Growth in loans and deposits is as expected, and the loan quality is good. The negative impact of the fall in interest rates on the decline in profitability is still ongoing, and the eight-month net profit result is EUR 0.5 million below the financial plan. However, as at the end of August, the loan portfolio exceeds the financial plan by EUR 163 million, and the deposit volume by EUR 461 million.
The reports of AS LHV Group are available at the address: 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, LHV Kindlustus, and LHV Bank Limited. The Group employs over 1,100 people. As at the end of August, LHV's banking services are used by 479,000 clients, the pension funds managed by LHV have 109,000 active clients, and LHV Kindlustus protects a total of 177,000 clients. LHV Bank Limited, a subsidiary of the Group, holds a banking licence in the United Kingdom and provides banking services to international financial technology companies, as well as loans to small and medium-sized enterprises.
Investor Relations
Sten Hans Jakobsoo
Head of Investor Relations and Corporate Development
Email: stenhans.jakobsoo@lhv.ee
Communications
Paul Pihlak
Head of Communications
Email: paul.pihlak@lhv.ee
