The year-end was a successful one for LHV, supported by strong loan issue and deposit taking. The company met the profit target set in the financial plan.
In 2024, AS LHV Group generated net revenue of 338.3 million euros, i.e., 11% more than in the previous year, thanks to strong business growth. Annual net interest income increased to 273.3 million euros (+8%) and net fee and commission income to 60.3 million euros (+24%). Consolidated expenditure for 2024 totalled 146.9 million euros, i.e., 14% higher than the previous year. The consolidated net profit of AS LHV Group in 2024 was 150.3 million euros, i.e., 9.4 million euros more than in 2023 (+7%).
Of the subsidiaries, AS LHV Pank earned a total of 140.5 million euros in net profit in 2024, UK Bank Limited 5.8 million euros, AS LHV Varahaldus 1.6 million euros, and AS LHV Kindlustus 1.2 million euros.
By the end of 2024, the consolidated assets of LHV Group increased to 8.74 billion euros, growing by 23% year-on-year, i.e., 1.64 billion euros. In Q4, the volume of assets increased by 12%.
The consolidated loan portfolio of LHV increased by 990 million euros to 4.55 billion euros (+28%) in 2024. In Q4, the loan portfolio increased by 10%, i.e., 426 million euros. Corporate loans increased by 328 million euros over the quarter and retail loans by 98 million euros.
The Group's consolidated deposits grew by 1.18 billion euros over the year to 6.91 billion euros (+21%). In Q4, deposits increased by 624 million euros, i.e., 10%, while deposits of regular clients increased by 134 million euros.
The total volume of funds managed by LHV increased by 39 million euros to 1.56 billion euros (+3%) over the year. In the last quarter of the year, the volume of funds increased by 37 million euros (+2%).
The number of processed payments related to clients that were financial intermediaries amounted to 74.8 million payments in 2024 (+51% compared to 49.5 million payments in 2023). In Q4, 19.8 million such payments were made, i.e., 6% more than in Q3.
In Q4 of 2024, AS LHV Group's consolidated net profit amounted to 36.3 million euros, which is 1.6 million euros more than in Q3 (+5%). On a year-on-year basis, quarterly profit increased by 11%. AS LHV Pank earned 34.8 million euros in net profit in Q4. In the last quarter of the year, LHV Bank Ltd earned a net profit of 640 thousand euros, AS LHV Varahaldus 509 thousand euros, and AS LHV Kindlustus 68 thousand euros. The return on equity attributable to the shareholders of the Group was 22% in Q4.
The Group's consolidated net income increased by 2% in Q4 compared to the previous quarter of the year to 84.9 million euros. Net income was 1% higher than last year. Net interest income was generated at 66.6 million euros, and net fee and commission income at 17.3 million euros. Consolidated operating expenses were 40.8 million euros in Q4, which is 14% higher than in Q3 and 13% higher than a year earlier.
| Income statement, EUR thousand | Q4-2024 | Q3-2024 | Q4-2023 |
| Net interest income | 66 556 | 67 426 | 67 670 |
| Net fee and commission income | 17 324 | 14 630 | 14 264 |
| Net gains from financial assets | -198 | 799 | 480 |
| Other income | 1 190 | 354 | 1 243 |
| Result from insurance activities | 49 | 357 | 371 |
| Total revenue | 84 921 | 83 566 | 84 029 |
| Staff costs | -22 831 | -19 499 | -17 765 |
| Office rent and expenses | -715 | -801 | -872 |
| IT expenses | -4 270 | -3 612 | -4 067 |
| Marketing expenses | -2 086 | -1 298 | -1 117 |
| Other operating expenses | -10 885 | -10 702 | -12 366 |
| Total operating expenses | -40 786 | -35 911 | -36 187 |
| EBIT | 44 136 | 47 655 | 47 841 |
| Earnings before impairment losses | 44 136 | 47 655 | 47 841 |
| Impairment losses on loans and advances | -1 085 | -7 277 | -9 430 |
| Income tax | -6 733 | -5 681 | -5 643 |
| Net profit | 36 318 | 34 698 | 32 768 |
| Profit attributable to non-controlling interest | 566 | 312 | 231 |
| Profit attributable to share holders of the parent | 35 752 | 34 386 | 32 537 |
| Profit attributable to non-controlling interest | 0.11 | 0.11 | 0.10 |
| Profit attributable to share holders of the parent | 0.11 | 0.10 | 0.10 |
| Balance sheet, EUR thousand | Dec 2024 | Sep 2024 | Dec 2023 |
| Cash and cash equivalents | 3 818 305 | 3 376 016 | 3 119 394 |
| Financial assets | 309 804 | 259 933 | 340 341 |
| Loans granted | 4 591 906 | 4 168 778 | 3 591 517 |
| Loan impairments | -39 813 | -42 543 | -29 725 |
| Receivables from customers | 5 367 | 10 598 | 49 505 |
| Other assets | 50 742 | 47 567 | 54 559 |
| Total assets | 8 736 311 | 7 820 348 | 7 125 590 |
| Demand deposits | 4 855 101 | 4 160 516 | 3 808 162 |
| Term deposits | 2 055 009 | 2 125 844 | 1 922 843 |
| Loans received | 927 686 | 679 550 | 563 634 |
| Loans received and deposits from customers | 7 837 795 | 6 965 910 | 6 294 639 |
| Other liabilities | 93 601 | 108 605 | 147 934 |
| Subordinated loans | 126 257 | 106 079 | 126 652 |
| Total liabilities | 8 057 653 | 7 180 595 | 6 569 225 |
| Equity | 678 657 | 639 754 | 556 365 |
| Minority interest | 8 571 | 8 006 | 7 937 |
| Total liabilities and equity | 8 736 311 | 7 820 348 | 7 125 590 |
LHV Group continued its rapid growth in 2024. The strong end to the year was influenced by a good level of client activity and higher than previous fee and commission income. The decline in interest income was mitigated by strong growth in the loan portfolio. Thanks to the good quality of the portfolio and the improvement in the macroeconomic situation, LHV reduced write-downs. The updated financial plan was accurately fulfilled by the end of the year.
The number of clients of LHV Pank increased by 10,900 to 455 thousand clients in Q4. Over the year, the number of the bank's clients increased by 38,000, i.e., more than 9%. At the end of the year, clients also actively used LHV's banking services, and the decrease in interest income was offset by better fee and commission income, especially from investment banking. As interest income continues to be under pressure, the bank is paying attention to limiting costs by increasing efficiency. In this regard, LHV Pank announced layoffs in December, reducing the workforce by 44 people.
The loan issue intensified in the last months of the year and, in Q4, the loan portfolio of LHV Pank increased by 300 million euros. The quality of the loan portfolio has remained stronger than planned, and write-downs on loans were reduced. The deposits of LHV Pank increased by 577 million euros in the last quarter of the year, of which 180 million euros came from deposits of regular clients and 450 million euros from financial intermediaries, and platform deposits were reduced. The bank is still keeping the focus on growing deposits. At the beginning of October, the bank also issued 250 million euros worth of covered bonds.
At the beginning of December, The Banker magazine of the Financial Times declared LHV the best bank of the year in Estonia. Furthermore, Q4 included a review of several important cooperation projects: LHV will be the main sponsor of both Estonian football and the biathlon in the coming years.
The loan portfolio of LHV Bank operating in the United Kingdom grew by more than half for the second quarter in a row. The loan portfolio increased by 126 million euros, while another 119 million euros of loans have been approved but not issued by the Credit Committee. The quality of the loan portfolio is generally strong. The volume of the deposits of LHV Bank increased by 70 million euros, with a total of nearly 11,600 depositors being involved. The volume of payments by financial intermediaries rose to record levels at the end of the year.
In December, LHV Bank opened a new mobile bank for its first clients, through which private persons can open an account and make payments. Further, the offer and app will continue to be improved, and their wider introduction to the market will be held in order to attract deposits directly from retail clients.
By the end of the year, the number of active clients of LHV Varahaldus making monthly contributions was 114,000. Nearly 14,000 of them submitted applications for larger contributions to the II pillar. Seasonally, contributions to the III pillar were actively made again. Operating income and expenses for the quarter remained at the level of the previous quarter. The profit was affected by a more modest financial income from the growth of the funds' own units than before, but the financial plan still managed to be outpaced.
The stock markets had a strong quarter driven by tech stocks and the U.S. market. The quarterly rate of return of the pension funds M and L managed by LHV was 1.0% and 0.6%, respectively, while XL decreased by 1.4% against the background of a weak December. The rate of return of the more conservative funds XS and S is 0.8% and 1.2%, respectively. Pensionifond Indeks increased by 4.2%; Pensionifond Roheline lost 5.7% in value over the quarter.
For LHV Kindlustus, strong sales results, but also seasonally increased loss events, set the tone at the end of the year. The number of policies in force and clients is in a stable growth trend. A good sales result was shown by most types of insurance. Revenue from the insurance service continued to grow, while operating expenses increased. Gross losses increased a little faster compared to earned income. For the year as a whole, LHV Kindlustus earned 1.2 million from net profit and, thus, outperformed the financial plan.
LHV Group's annual cost/income ratio turned out to be 43.4%, and return on equity 24.5%. The Group's liquidity and capitalisation remain strong. In November, LHV Group conducted a successful offering of subordinated bonds, raising 20 million euros in capital from investors. LHV Group will publish the 2025 financial plan and five-year forecast on 13 February.
Comment by Madis Toomsalu, Chairman of the Management Board at LHV Group:
"The changes taking place in the world are probably the biggest in the last half century. We are witnessing the growth of geopolitical ambitions, structural changes in the economy, the decline of free trade, and the exponential growth of technological development.
Despite the different directions, 2024 was a successful year for LHV. After the supervisory exchange, we were able to restore the historically ambitious growth in business volumes. With a strong growth of 1 billion euros, i.e., 28% of the loan portfolio and a higher base interest rate, we achieved the highest business volumes and financial results in history.
In Estonia, we have grown into the second largest bank in terms of corporate loans. At the same time, the volume of home loans and the insurance business are also growing rapidly. The number of the Estonian bank's clients increased by 38,000 and activity increased in all the important areas. In the United Kingdom, the corporate loan portfolio already exceeded 300 million euros by the end of the year, which is why we are increasing our long-term expectations. This is also reflected in the mobile app launched at the end of the year."
To access the reports of AS LHV Group, please visit the website at: https://investor.lhv.ee/en/reports/.
In order to present the financial results, LHV Group will organise an investor meeting via the Zoom webinar platform. The virtual investor meeting will take place on 11 February 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_UP-IqHxNSRSVeoKeUcTOfQ.
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 1,200 people. As at the end of December, LHV's banking services are being used by nearly 460,000 clients, the pension funds managed by LHV have 114,000 active clients, and LHV Kindlustus is protecting a total of 170,000 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: priit.rum@lhv.ee
