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LHV Group updated the long-term financial forecast

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The Supervisory Board of AS LHV Group approved the updated financial forecast
for 2019-2023 pursuant to which, the forecast for the growth of LHV's business
volumes has been significantly increased.

In addition to the results of 6 months of 2019, the updated forecast has also
considered the purchase transaction of Danske's loan portfolio, increased loan
volumes and deposits, and the effects of the lower Euribor. The estimated profit
for 2019-2023 will increase by a total of EUR 7.3 million; the change in profit
in different years will remain in the 10% range compared to the existing
forecast.

According to the updated forecast, LHV Group will earn a net profit of EUR 25.6
million in the current year, which is EUR 1.8 million less than what has
previously been estimated. The increased costs compared to the previous forecast
are related to one-off expenses regarding the purchase of Danske's private loan
portfolio and the effects of more expensive temporary financing involved via
deposit platforms for conducting the transaction. The increased expenses are
partially covered by loan volumes that increased by EUR 122 million, to which
Danske's private loan portfolio in the amount of EUR 447 million will be added
at the end of November.

In 2020, the profit will reach EUR 39.2 million, which is EUR 2.8 million higher
than what was previously forecast. The effect of the lower Euribor will be
covered by higher interest income from the loan portfolio that has increased by
EUR 653 million (at that, the volume of loans issued in 2020 has been increased
by EUR 84 million in the forecast) and the decrease in costs due to issuing
covered bonds which will replace the deposits involved from deposit platforms.

In 2021, the profit will reach EUR 50.0 million, which is EUR 3.6 million higher
than what was previously forecast. The effect of the lower Euribor will be
covered by higher interest income from the loan portfolio that has increased by
EUR 731 million (at that, the volume of loans issued in 2021 has been increased
by EUR 78 million in the forecast) and the lower financing cost of the private
loan portfolio.

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 Key indicators                    FF2019 FF2020 FF2021 FF2022 FF2023
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 Profit before taxes               29.6   45.2   58.5   71.0   84.6
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 Net profit                        25.6   39.2   50.0   61.1   72.5
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 Loans                             1751   2101   2517   2898   3282
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 Deposits                          2605   2968   3390   3902   4443
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 Fund volume                       1407   1663   1946   1893   1962
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 Cost/income ratio                 51.5%  44.2%  40.7%  38.3%  36.4%
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 ROE (before taxes; owners' share) 15.6%  19.9%  22.0%  22.6%  22.6%
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 Capital adequacy                  17.6%  17.9%  18.4%  19.3%  19.5%
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(* Business volumes have been presented in millions of euros)

According to Madis Toomsalu, CEO of LHV Group, the need to update the financial
forecast arose from the plan to involve share capital in the coming months.
"When assessing our doings of the last year, the growth of LHV has been
outstanding and has even accelerated in terms of volume. That is why we now dare
to claim that our expectations for the future have also grown. We wish to
provide investors with an as clear and transparent picture of LHV's future as
possible. This year, we have actively grown our business, and different effects
have emerged which must be considered in a long-term forecast. We have strongly
increased our expectations for loan volumes, which we increased, compared to the
previous forecast, by 570 million euros for the end of 2019 and by 873 million
euros for the end of 2023. We increased deposits by 742 million euros for the
end of 2019 and by 1.13 billion euros for the end of 2023. Since we intend to
increase the share capital of LHV Group in September, we are publishing a new
financial forecast, which will best convey our vision regarding the growth of
the company," said Toomsalu.

Key changes compared to the earlier financial forecast:

  * Adding the purchase transaction of Danske's loan portfolio of private
    persons into the business plan.
  * Increasing loan volumes:

      * by EUR 569 million in 2019, including by EUR 447 million originating
        from the Danske transaction;
      * by EUR 84 million in 2020;
      * by about EUR 70-80 million per year in the following years.

  * Increasing deposit volumes:

      * by EUR 745 million in 2019, including by EUR 350 million via deposit
        platforms;
      * replacing deposits with covered bonds in 2020;
      * the volumes of demand deposits are increased in the following years.

  * Taking into consideration the Euribor that is lower than what was previously
    estimated.
  * Considering the results of 6 months of 2019.

According to the updated forecasts, LHV is a highly capitalised financial group
with strong liquidity, whose return on equity before taxes remains at around
20%.

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 nearly 420 people. LHV's banking services are used by over 179,000
clients, and pension funds managed by LHV have more than 177,000 active clients.



Priit Rum
LHV Communication Manager
Phone: +372 502 0786
Email: [email protected] (mailto:[email protected])