LHV Group results in July 2023
In July, all LHV Group subsidiaries operated profitably, continuing to grow business volumes. LHV continued preparations for several important projects.
The consolidated deposits of AS LHV Group increased by EUR 130 million in July. In the context of rising interest rates, the share of fixed-term deposits increased by EUR 170 million, while demand deposits decreased by EUR 40 million. Deposits from regular clients increased by EUR 73 million, deposits from a deposit platform were involved in the amount of EUR 27 million, and deposits from financial intermediaries increased by EUR 30 million. The Group’s consolidated loan portfolio increased by EUR 28 million. Retail loans increased by EUR 12 million and loans to companies by EUR 16 million. The volume of funds managed by LHV increased by EUR 31 million in July. During the month, 4.1 million payments from financial intermediary clients were processed.
The consolidated net profit of AS LHV Group was EUR 13.5 million in July. AS LHV Pank generated a net profit of EUR 11.9 million, LHV Bank Limited EUR 1.4 million, AS LHV Varahaldus EUR 0.4 million, and AS LHV Kindlustus EUR 0.1 million. The Group’s return on equity was 32.6%.
The number of LHV bank clients increased by 3,500 in July, and the number of settling clients increased by the same amount. The bank’s business volumes, revenues, and expenses are ahead of plan. As the revenues are influenced by the environment of higher than expected interest rates, expenses have been increased by the payment rate of the deposit guarantee fund. Credit quality remained good in July. Preparations continued for the transfer of financial intermediaries clients to the UK bank, as well as projects related to the supervision of the European Central Bank.
The focus is still on deposits. Interest rates for deposits in Estonia have reached the highest level in Europe due to competition. By the end of the month, the interest paid for a one-year fixed-term deposit rose to 4.25%.
LHV Bank Limited continued to increase the volume of loans to companies. By the end of the month, the loan portfolio reached EUR 47 million. In addition to the transfer of business activities, preparations are being made for the introduction of a new loan system and the launch of deposit-taking.
Pension funds managed by LHV Varahaldus showed positive rates of return in July. The rate of return for larger funds M, L, and XL was 0.8%, 1.1%, and 1.5%, respectively. Pension Fund Index rose by 3.3%, Pensionifond Roheline by 2.6%. Varahaldus continues as planned, but the number of active clients decreased in July.
LHV Kindlustus continued to grow its business steadily – over 13 thousand new agreements were signed. Claims amounting to EUR 1.4 million were compensated and 4,600 new claims were registered. Earned bonuses grew by 7.7% month-on-month. Insurance net loss and expense ratios were better than planned.
As LHV is significantly ahead of the financial plan published in February, the company will publish an updated version of the 2023 Financial Plan in September, at the latest.
To access the reports of AS LHV Group, please visit the website at .
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 970 people. As of June, LHV’s banking services are being used by 404,000 clients, the pension funds managed by LHV have 127,000 active clients, and LHV Kindlustus protects a total of 161,000 clients. LHV Bank, a subsidiary of the Group, holds a banking licence in the UK and provides banking services to international financial technology companies, as well as loans to small and medium-sized enterprises.
Priit Rum
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