Börsiteade

Pealkiri

Correction: LHV Group unaudited financial results for Q1 2025

Teade

--- 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
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    Net interest income                                 62 010  66 556  68 918
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    Net fee and commission income                       14 071  17 323  15 543
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    Net gains from financial assets                      2 748    -198     536
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    Other income                                           594      49     418
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 Total revenue                                          79 422  83 730  85 415
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    Staff costs                                        -22 656 -22 831 -20 275
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    Office rent and expenses                              -659    -715    -572
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    IT expenses                                         -3 576  -4 270  -3 100
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    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
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 EBIT                                                   41 879  42 946  49 888
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 Earnings before impairment losses                      41 879  42 946  49 888
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    Impairment losses on loans and advances             -5 667  -1 085  -2 851
------------------------------------------------------------------------------
    Income tax                                          -7 052  -6 733  -6 335
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 Net profit                                             29 160  35 128  40 702
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    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
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    Cash and cash equivalents                  3 279 271 3 818 305 3 402 338
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    Financial assets                             442 463   309 804   249 968
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    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
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    Other assets                                  46 698    50 742    50 733
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 Total assets                                  8 508 285 8 736 311 7 370 572
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       Demand deposits                         4 834 265 4 855 101 3 926 714
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       Term deposits                           1 770 227 2 055 009 2 007 628
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       Loans received                            936 215   927 686   568 355
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    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
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 Equity                                          677 640   678 657   598 734
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    Minority interest                              7 133     8 571     7 394
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 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: [email protected] (mailto:[email protected])