— At the auditor’s suggestion, the corrected version reflects declared but unpaid dividends as a liability. Accordingly, the figures for liabilities, equity, and return on equity have been adjusted. —
The first quarter of the year was characterised by rapid growth in business volumes for LHV, but also by a decrease in profit due to lower interest rates and increased impairments.
In Q1 2025, AS LHV Group earned EUR 29.2 million in net profit. AS LHV Pank earned EUR 25.2 million and LHV Bank Ltd EUR 2.1 million in net profit. At the same time, the net profit of AS LHV Varahaldus was EUR 103 thousand and of AS LHV Kindlustus EUR 665 thousand in Q1. The return on equity attributable to the shareholders of the Group was 17.0% in Q1.
On a consolidated basis, LHV earned EUR 79.4 million in revenue in Q1 2025, i.e. 6% less than in the previous quarter and 5% less than a year ago. Of the revenue, net interest income accounted for EUR 62.0 million, and net fee and commission income for EUR 14.1 million. The expenses of the consolidation group totalled EUR 37.5 million in Q1, which is 8% less than in the previous quarter, but 10% more than in Q1 of 2024. Impairments totalled EUR 5.7 million in Q1, which is twice as much as a year earlier. The net profit of the Group in Q1 was 20% lower than in the previous quarter and 28% lower than in the same period a year earlier.
As at the end of March, the consolidated assets of the LHV Group stood at EUR 8.51 billion (annual growth of 15%). Over the quarter, the asset volume dropped by 3%, i.e. EUR 228 million. The consolidated loan portfolio grew by EUR 177 million, i.e. 4%, to EUR 4.73 billion over the quarter (+30% year-on-year). The consolidated deposits of the LHV Group decreased by EUR 306 million (-4%) to EUR 6.60 billion (+11% year-on-year). The total volume of funds managed by LHV increased by EUR 1 million (+0%) to EUR 1.56 billion (annual growth of +1%) over the quarter. The number of payments made by customers who are financial intermediaries reached a record 20.1 million payments in Q1, which is 1% more than in Q4 of the previous year.
| Income statement, EUR thousand | Q1-2025 | Q4-2024 | Q1-2024 |
| Net interest income | 62 010 | 66 556 | 68 918 |
| Net fee and commission income | 14 071 | 17 323 | 15 543 |
| Net gains from financial assets | 2 748 | -198 | 536 |
| Other income | 594 | 49 | 418 |
| Total revenue | 79 422 | 83 730 | 85 415 |
| Staff costs | -22 656 | -22 831 | -20 275 |
| Office rent and expenses | -659 | -715 | -572 |
| IT expenses | -3 576 | -4 270 | -3 100 |
| Marketing expenses | -1 258 | -2 086 | -658 |
| Other operating expenses | -9 394 | -10 882 | -10 924 |
| Total operating expenses | -37 543 | -40 783 | -35 528 |
| EBIT | 41 879 | 42 946 | 49 888 |
| Earnings before impairment losses | 41 879 | 42 946 | 49 888 |
| Impairment losses on loans and advances | -5 667 | -1 085 | -2 851 |
| Income tax | -7 052 | -6 733 | -6 335 |
| Net profit | 29 160 | 35 128 | 40 702 |
| Profit attributable to non-controlling interest | 592 | 565 | 158 |
| Profit attributable to share holders of the parent | 28 568 | 35 754 | 40 544 |
| Profit attributable to non-controlling interest | 0.09 | 0.11 | 0.13 |
| Profit attributable to share holders of the parent | 0.09 | 0.11 | 0.12 |
| Balance sheet, EUR thousand | Mar 2025 | Dec 2024 | Mar 2024 |
| Cash and cash equivalents | 3 279 271 | 3 818 305 | 3 402 338 |
| Financial assets | 442 463 | 309 804 | 249 968 |
| Loans granted | 4 774 970 | 4 591 906 | 3 676 442 |
| Loan impairments | -45 628 | -39 813 | -31 843 |
| Receivables from customers | 10 511 | 5 367 | 22 934 |
| Other assets | 46 698 | 50 742 | 50 733 |
| Total assets | 8 508 285 | 8 736 311 | 7 370 572 |
| Demand deposits | 4 834 265 | 4 855 101 | 3 926 714 |
| Term deposits | 1 770 227 | 2 055 009 | 2 007 628 |
| Loans received | 936 215 | 927 686 | 568 355 |
| Loans received and deposits from customers | 7 540 707 | 7 837 795 | 6 502 697 |
| Other liabilities | 163 691 | 93 601 | 141 573 |
| Subordinated loans | 126 247 | 126 257 | 127 568 |
| Total liabilities | 7 830 644 | 8 057 653 | 6 771 838 |
| Equity | 677 640 | 678 657 | 598 734 |
| Minority interest | 7 133 | 8 571 | 7 394 |
| Total liabilities and equity | 8 508 285 | 8 736 311 | 7 370 572 |
The profitability of LHV was affected at the beginning of 2025 by a decrease in interest rates and temporarily higher provisions made to individual customers. At the same time, revenue was slightly better than planned, supported by an increase in business volumes and a good level of customer activity. LHV Pank’s more modest than planned profit was compensated by LHV Bank’s higher-than-planned profitability.
The number of LHV Pank clients increased by 9,700 over the quarter. Customers actively used payment services and bank cards. The number of Entrepreneur Account users exceeded 30,000 over the quarter. Bank deposits decreased by EUR 309 million over the quarter, but this was due to a decrease of EUR 232 million in deposits from financial intermediaries and EUR 80 million from platform deposits. Involving deposits is still in focus for the bank. LHV Pank was recognised as the bank with the best service in Estonia by the research company Dive.
The loan portfolio volume of LHV Pank increased by a total of EUR 35 million over the quarter. At the same time, the offering of home loans was active: the portfolio volume grew by EUR 81 million and exceeded the of EUR 1.5 billion over the quarter. The quality of the bank’s loan portfolio as a whole remained stronger than planned, with model-based impairments improving. At the same time, the classification of two customers as non-working resulted in significantly higher impairments: the goal is to partially reverse these within a couple of quarters. This also affected the profit gap from the financial plan.
The loan portfolio of LHV Bank, operating in the United Kingdom, grew at a record pace by EUR 142 million to EUR 490 million. At the same time, there are loans approved by the credit committee but not yet issued in the value of EUR 167 million, which allows us to assume that the rapid growth will continue. To support the rapid growth of the loan portfolio, the bank’s share capital was increased by EUR 12 million in March.
Deposits taken by LHV Bank increased by EUR 115 million. The first few hundred customers have joined the retail banking mobile app. During the quarter, the account opening process was significantly improved and fixed-term deposits and card payments for the first customers were opened. In the area of financial intermediaries, the focus was primarily on the integration and activation of larger new customers in order to create pre-conditions for an increase in the volume of pound payments in the second half of the year.
Compared to recent years, significantly greater uncertainty on the stock markets also affected the pension funds managed by LHV Varahaldus. At the same time, actively managed funds succeeded in preserving the assets of pension savers better than their competitors, as the quarterly rate of return of LHV’s pension funds M, L , and XL was 3.0%, 3.8%, and 4.5%, respectively. The rate of return of the more conservative funds XS and S was 1.5% and 2.1%, respectively. Pension fund Indeks decreased by 4.1% and Roheline lost 5.2% in value over the quarter.
Both the operating income and net profit of LHV Varahaldus exceeded the financial plan. The profit was positively affected by the financial income from equity units that accompanied the rate of return of the funds. However, the profit was reduced by the income tax accompanying the dividend payment made in March. In January, the company launched a new LHV Euro Bond Fund. In March, the nearly 17-year-long outdoor sale of LHV pension funds in shopping centres ended, and in the future, other opportunities will be sought to promote the sale.
The growth trend of LHV Kindlustus continued in Q1. Sales were affected by a market-wide decline in insurance premiums, but sales increased by EUR 2.1 million year-on-year. Net earned premiums continued to grow. There were no major loss events in the first three months of the year, but medium-sized losses were registered more often and the number of travel insurance claims increased. The increase in losses over the past year has been proportional to the growth of the portfolio. The number of effective insurance contracts has increased to 266,000 and the number of customers to 174,000.
LHV Group is well capitalised and all capital objectives have been met with a sufficient margin. At the annual general meeting of shareholders held in March, it was decided to pay a dividend of 9 cents per share to the shareholders for the previous year. The dividends were paid on 10 April. LHV Group fell short of the financial plan published in February by EUR 1.2 million in terms of net profit for the first three months. The financial plan stands.
Comment by Madis Toomsalu, the Chairman of the Management Board at LHV Group:
“Decisions are currently being made in global trade policy, the outcome of which is not known in advance. Against this background, the positive growth in Estonia and in the United Kingdom is rather within the margin of error, depending primarily on the investment courage of entrepreneurs. LHV wants to stay open and support good ideas.
In the competitive Estonian home loan market, we have managed to grow the portfolio of LHV. We are working to further increase the share of active customers. In terms of the business environment, we look favourably at initiatives that could support the entrepreneurial landscape, for example, through regulations and reducing bureaucracy.
In the United Kingdom, LHV’s loan business is gaining momentum. We soon hope to more widely introduce an offer aimed at retail customers.”
The reports of AS LHV Group are available on the website at: https://investor.lhv.ee/en/reports/.
In order to present the financial results of LHV, the company will organise an investor meeting via the Zoom webinar platform. The virtual investor meeting will take place on 22 April at 9:00, before the market opens. The presentation will be in Estonian. We kindly ask you to register at the following address: https://lhvbank.zoom.us/webinar/register/WN__57Iel-DQeeINK3BSksMdQ.
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 1,160 people. As at the end of March, LHV’s banking services are being used by 465,000 clients, the pension funds managed by LHV have 113,000 active customers, and LHV Kindlustus is protecting a total of 174,000 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.
Priit Rum
Communications Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee
Attachments
- LHV_Group_Interim_Report_2025-Q1-EN
- LHV_Group_Presentation_2025-Q1-EN
- LHV_Group_Factbook_2025-Q1-ET
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