Market announcement

Title

Audited Annual Report 2017 of AS LHV Group and dividend proposal

Message

The management board of AS LHV Group sent to the Supervisory Board the 2017
audited annual report of AS LHV Group and the Supervisory Board approved it on
23 February. Financial results remained unchanged compared to the preliminary
disclosure published on 6 February 2018. 

AS LHV Group Consolitated Annual Report 2017 is attached to this announcement
and will be made available on LHV homepage
https://www.lhv.ee/en/for-investors/reports/. 

LHV Group’s pre-tax profit for 2017 amounted to EUR 23.4 million and net profit
totalled EUR 22.2 million. Pre-tax profit is 16% more than a year before. Net
interest income grew 18% and net fee income increased 16%. Financial income
decreased by 25%. The Group’s net income was EUR 58.7 million and increased by
16% compared to the previous year. Operating expenses amounted to 31.9 million
euros and increased by 10% over the year. The Group met the financial forecast
published at the beginning of 2017. 

By the end of December, the total volume of the LHV’s consolidated loan
portfolio less impairments amounted to EUR 732 million (2016: EUR 538 million).
The volume of portfolio increased 36% in a year. In the loan portfolio, the
majority is corporate loans that increased 34% in a year to EUR 510 million
(2016: EUR 380 million). The portfolio of retail loans increased 41% in a year,
amounting to EUR 230 million (2016: EUR 163 million). The volume of Group’s
deposits increased 98% in a year and totalled EUR 1,537 million by the year-end
(2016: EUR 777 million). The share of demand deposits of all deposits increased
and reached 92% (2016: 80%). The volume of investment funds managed by LHV grew
by EUR 129 million, amounting to EUR 1,103 million (2016: EUR 974 million) at
the end of the year. 

By business units, in consolidated figures in 2017, AS LHV Pank earned a profit
of EUR 15.5 (2016: 13.2) million, AS LHV Varahaldus earned EUR 5.8 (2016: 6.1)
million and UAB Mokilizingas earned EUR 1.9 (2016: 1.9) million. LHV Group as a
separate entity earned a profit of EUR 2.7 million (2016: a loss of EUR 1.3
million), due to the fact that the subsidiary LHV Varahaldus paid dividends to
LHV Group. 

The management board of LHV Group proposes to the General Meeting of
Shareholders to pay dividends EUR 0.16 per share for 2017 (in the total amount
of EUR 4.123 million), transfer EUR 0.98 million to statutory reserve capital
and transfer the profit for reporting period attributable to shareholders of
the parent in the amount of EUR 14,5 million to retained earnings. 

The list of shareholders who are entitled to receive dividends will be
established on 26 April 2018 at the end of the working day of the settlement
system. As a result the date of change in the right to receive dividens
(ex-date) will be 25 April 2018. From this date persons obtaining shares will
not be entitled to dividends for the 2017 financial year. Dividends shall be
disbursed to the shareholders on 27 April 2018. 

LHV Group is the largest domestic financial group and capital provider in
Estonia. LHV Group's key subsidiaries are AS LHV Pank and AS LHV Varahaldus.
LHV employs over 360 people and over 135,000 customers use LHV’s banking
services. Pension funds managed by LHV have over 176,000 active customers. 




         Priit Rum
         Communication Manager
         Phone: +372 502 0786
         Email: [email protected]