LHV Group results in October 2020
In October, AS LHV Group earned EUR 2.6 million in net profit. AS LHV Pank earned EUR 2.9 million in net profit, and the net profit of AS LHV Varahaldus was EUR 0.2 million.
The business volumes and revenues have continued to increase. The biggest impact came from finalising the acquisition of the Danske Bank corporate and local government portfolio, which led to increased interest income; however, the registration of collateral and loan impairments caused higher one-off expenses. Private loans continued rapid growth and more than 5000 new clients joined the bank. Also, the number of pension fund clients kept growing. Altogether, EUR 1.4 million of new loan impairments were made, half of which originated from the Danske portfolio, with the other half related to forward-looking allowances of single clients.
In October, we launched green loans for businesses to facilitate informed investments of clients in more energy-efficient solutions. Additionally, the loan product designed for apartment associations, presented at the beginning of the month, has established itself well, having already been used by several apartment associations for investments.
Last month we disclosed our target to create a new bank to replace the UK branch, in order to better differentiate the offer of LHV banking services in Estonia and to international payment intermediaries. We are now starting the process. We also announced that in a year, we are going to open a client office in Pärnu, which will enable us to provide convenient services to all clients in the Pärnu region.
An important event in October was the decision of the Supreme Court about the II pension pillar reform and announcement of the legislative amendment. Although the reform will not resolve the substantial bottlenecks of the pension system, those saving for a pension will have an opportunity to decide on the future of their funded pension the following year. LHV is fully prepared for the change. We want to offer our clients a possibility to make an informed decision and provide them with a range of pension funds with the best return to save for the future. At the same time, we are also in the middle of creating a suitable pension investment account for pension-savers. Only 1.2% of LHV’s pension clients used the opportunity in October to suspend pension contributions.
The volume of LHV deposits grew by EUR 119 million, to EUR 3.33 billion in October. The consolidated loan portfolio increased by EUR 279 million, to EUR 2.13 billion. The finalisation of the acquisition of the Danske Pank loan portfolio increased the loan portfolio by EUR 254 million. The funds managed by LHV did not change in October.
Compared to the financial plan updated in October, the cumulative net profit is EUR 0.6 million less than planned.
AS LHV Group 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 and LHV Varahaldus. LHV employs over 500 people. LHV’s banking services are used by more than 240,000 clients, and pension funds managed by LHV have more than 184,000 active clients. LHV’s UK branch offers banking infrastructure to 130 international financial services companies, via which LHV’s payment services reach clients around the world.
LHV Communication Manager
Phone: +372 502 0786