Börsiteade

Pealkiri

LHV Group's first quarter unaudited financial results

Teade

LHV Group earned EUR 3.5 million of profits in Q1
LHV Groups consolidated profit for Q1 of 2016 amounted to EUR 3.5 million, with
the bank earning EUR 2.9 million, asset management EUR 0.6 million and the
Lithuanian business unit EUR 0.3 million. LHV Group's return on equity was
16.8% in Q1. 

In Q4 of 2014 LHV Group posted a net profit of EUR 3.2 million and in Q1 last
year EUR 5.1 million as the company received extraordinary revenue from the
sale of the Finnish loan portfolio. 

During the first three months of this year the group's consolidated loan
portfolio grew by EUR 22 million (+5%) reaching EUR 432 million and deposits
grew by EUR 28 million (+ 4%) to EUR 645 million. The volume of funds managed
by LHV grew by EUR 27 million (+5%) in the quarter reaching 597 million. 

According to Erkki Raasuke, CEO of LHV Group the company had a really good
start to the year: „We were standing ready for a spirited start, but the
reality has surpassed our expectations. We continue to witness new customer
flows that demonstrate the persistent growth in LHV's prominence. The quality
of our work has been acknowledged by various organizations engaged in the
evaluation of the financial sector. LHV now stands ready to take another step
and list its shares on the Tallinn Stock Exchange. 

For the Bank the increase in interest income can be attributed to the growth in
the loan portfolio. Net fee and commission income remained on par with the
previous quarter. Deposit interest expenses are expected to drop, with the
interest rates of term deposits lowered in March. Overheads were seasonally
lower, but contained higher one-off personnel expenses related to the
termination of operations in the Latvian branch. 

Credit quality has remained strong, however a separate risk assets department
was established in order to prepare for any changes in the credit cycle and
take account of the ever-growing loan portfolio. 

The first quarter saw a continued growth in the number of new customers with
the total reaching 89,000. In January, Nasdaq declared LHV Bank the Baltic
Member of the Year. In February, the survey company Dive declared LHV Bank the
bank with the best service in Estonia. 

As for Asset Management the slight profit decrease can be attributed to the
excellent sales results, and the relevant increase in marketing expenses. When
it comes to investing, result is all that matters. With the future pensioners
now acknowledging LHV Asset Management as the provider of best yields, we are
witnessing a record number of new customers. Active customer numbers grew by
nearly 5,000 during the quarter reaching 135,000, an all-time high. In January
LHV Asset Management signed an agreement to purchase Danske Capital AS. After
the transaction LHV Asset Management will be the second-largest pension fund
manager in Estonia. 

Mokilizingas' profit for Q1 amounted to EUR 0.3 million. The weaker result
compared with the last quarter can be attributed to a larger write-down of
loans, partially due to technical reasons. The overall loan quality remains
strong. The loan portfolio showed no major changes from last quarter.
Considering the seasonal nature of consumer financing, this can be considered a
good result,” commented Erkki Raasuke. 

Income statement, EURt                                 Q1-2016  Q4-2015  Q1-2015
Net interest income                                      6 788    6 370    5 222
Net fee and commission income                            3 654    3 802    3 342
Net gains from financial assets                            199      189      465
Other income                                               -15       21        1
Total revenue                                           10 626   10 382    9 030
Staff costs                                             -3 225   -3 014   -2 585
Office rent and expenses                                  -383     -361     -339
IT expenses                                               -443     -383     -340
Marketing expenses                                      -1 088   -1 130     -840
Other operating expenses                                -1 688   -2 101   -1 344
Total operating expenses                                -6 828   -6 988   -5 448
EBIT                                                     3 798    3 394    3 582
Earnings before impairment losses                        3 798    3 394    3 582
Impairment losses on loans and advances                   -255      -35     -656
Income tax                                                 -77      -72      -69
Loss from associates accounted for using the equity          1      -36        0
 method                                                                         
Net profit for the reporting period from continued       3 466    3 251    2 857
 operations                                                                     
Profit/-loss from discontinued operations                    0       -2    2 258
Net profit                                               3 466    3 249    5 115
Profit attributable to non-controlling interest            447      422       89



Balance sheet, EURt                        March 2016  December 2015  March 2015
Cash and cash equivalents                     249 012        230 501     113 474
Financial assets                               98 698        110 116     146 752
Loans granted                                 436 673        414 677     331 278
Loan impairments                               -4 842         -4 680      -4 509
Receivables from customers                      1 628          2 026       1 448
Other assets                                    3 969          4 487       4 032
Total assets                                  785 139        757 126     592 475
Demand deposits                               442 243        432 811     275 002
Term deposits                                 202 664        184 411     184 411
Loans received                                 15 228         15 538      15 538
Loans received and deposits from              660 135        632 760     474 951
 customers                                                                      
Other liabilities                              16 608         20 227      23 415
Subordinated loans                             30 900         30 900      30 900
Total liabilities                             707 643        683 886     529 266
Equity                                         77 496         73 240      63 209
Minority interest                               3 688          3 241       2 372
Total liabilities and equity                  785 139        757 126     592 475

Reports of AS LHV Group are available at
https://www.lhv.ee/en/for-investors/reports. 

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 250 people and about 90,000 customers use LHV’s banking
services. LHV's pension funds have over 135,000 customers. 


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