In the first quarter of 2021, AS LHV Group altogether earned EUR 11.4 million in consolidated net profit. Within the quarter, the bank earned EUR 11.8 million in net profit, including EUR 2.2 million from servicing clients related to the UK branch. Varahaldus generated EUR 0.6 million in net loss, and Kindlustus generated EUR 0.3 million in net loss. The Group’s return on equity in Q1 was 18.2%.

Year-on-year, the net profit of LHV Group was EUR 3.9 million (53%) higher in Q1, and EUR 6.6 million (37%) lower than in Q4 2020, when the profit of the Group also included the success fee related to managing pension funds. By the end of Q1, LHV is ahead of the financial plan for 2021, published in February, by EUR 0.9 million.

By the end of March, the consolidation group’s volume of assets increased to EUR 5.68 billion. Within the quarter, the volume of the Group’s consolidated loan portfolio grew by EUR 96 million (+4%; + EUR 353 million in Q4) to EUR 2.3 billion, and deposits increased by EUR 614 million (+15%; + EUR 904 million in Q4) to EUR 4.73 billion. In terms of growth of deposits, EUR 595 million came on account of financial intermediaries and EUR 54 million from regular clients, the proportion of deposit platforms decreased by EUR 35 million. The total volume of funds managed by LHV increased by EUR 50 million (+3%; + EUR 41 million in Q4), to EUR 1.59 billion.

In the LHV loan portfolio, corporate loans increased by EUR 68 million, and retail loans by EUR 28 million within the first quarter. Within a year, LHV Group’s loan portfolio has increased by EUR 565 million, i.e., by 33%. Regardless of the quick growth, no compromises have been made in credit quality which remains good; wage subsidies by the State and grace periods offered by banks have enable to ensure monetary buffers for borrowers. The grace periods granted last year have mostly ended on time; the volume of loans subject to grace periods has decreased from the original EUR 350 million to EUR 60 million by the end of Q1. This year as well, the State has established restrictions to impede the virus; at the same time, since February, clients have applied for new grace periods only in the extent of EUR 11 million.

LHV has undertaken to support the fulfilment of climate goals. To facilitate the purchase of the most climate-friendly vehicles, we reduced the interest rate of leasing electric vehicles to 1.95% in March. The same interest rate also applies to the green home loan. These are the most favourable interest rates in LHV.

To stimulate investment activity, LHV reduced the services fees for foreign securities in February. Firstly, we introduced the Pension Investment Account, or PIA, to the market which pension savers can use to make investments themselves within the II pillar system. By mid-April, 2000 investors had signed up for a PIA.

Among other important events in the quarter, LHV Group’s subsidiary LHV UK Limited was registered in the United Kingdom Companies House in February. Within the quarter, LHV Kindlustus started concluding the first home insurance contracts, and took over extended warranty insurance contracts related to the sale of technological devices by Euronics. LHV bank cards were added the possibility to see one’s PIN digitally, and the possibility for private clients to enable the permanent donation function on the debit card, which enables to contribute to charity with every card payment.

Pension funds showed a positive rate of return, although actively managed funds were bested by index funds due to lower equity risk. One part of this relates to maintaining the necessary liquidity in actively managed funds for clients leaving in September. By the end of March, the number of clients leaving the II pillar in September and their volume of assets became clear; these remained lower than estimated.

Comment by Madis Toomsalu, CEO of LHV Group:
"LHV has started out strong this year. We have continued to finance the Estonian economy, made the first successful steps in establishing a bank in the United Kingdom which requires obtaining a regulatory permit; we have vigorously increased our number of clients, strengthened the offers of our services, and once again received recognition for being the bank with the best service.

We have increased our market share in the loan market and grown our role as market leader in the field of investment services. The keywords are activity and the will to contribute to the growth of Estonian capital. LHV has continued to finance clients during the restrictions, as well. In January and February, LHV’s market share in granting loans to Estonian companies was over 50%. For home loans, the respective indicator was 12%. Interest in investing continues to grow, when during the quarter, clients concluded nearly 16,000 new investment contracts, and over 8,000 clients with assets were added. In terms of investment services, we contributed to growth with the most complete product portfolio, widely offering investment education, with the best broker service in the Baltics, and with the most favourable service fees.

LHV’s market value has increased by over EUR 400 million within the year. I am extremely glad that growing to become the largest listed company in Estonia and the related increase in value is divided between 13,000 shareholders who are Estonian people and companies."

AS LHV Group reports are available at: https://investor.lhv.ee/en/reports.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, and LHV Kindlustus. LHV employs over 560 people. LHV’s banking services are used by nearly 274,000 clients, and pension funds managed by LHV have nearly 177,000 active clients. LHV’s UK branch offers banking infrastructure to 150 international financial services companies, via which LHV’s payment services reach clients around the world.

The annual general meeting of shareholders of AS LHV Group (Group), held today in Hilton Tallinn Park Hotel (Fr. R. Kreutzwaldi St 23), approved the Annual Report and decided the dividend payment for 2020.

A total of 135 shareholders participated and were represented at the meeting, with their corresponding shares representing a total of 21,820,468 votes. This means 75,72% of the votes determined by shares were represented at the meeting. Of the participants 112 shareholders, representing a total of 20,417,126 votes, cast their votes in advance of the meeting electronically in order to prevent the spread of COVID-19.

The notice on calling the annual general meeting was published in the stock exchange information system and on LHV website on 2 March 2021. On the same date, the notice was printed in Eesti Päevaleht daily newspaper.

The annual general meeting of the shareholders of AS LHV Group resolved:

1. Approval of the Annual Report 2020
   The general meeting unanimously resolved to approve the Annual Report 2020 of the Group, as presented to the general meeting.

2. Profit allocation for 2020
   The profit attributable to the Group as the parent company of the consolidation group in the financial year 2019 amounted to EUR 37,950 thousand. The general meeting decided to transfer EUR 0 to the legal reserve.
   The general meeting decided unanimously to approve the profit allocation proposal made by the Management Board and pay dividends in the net amount of 29 euro cents per share.
   The list of shareholders entitled to receive dividends will be established as at 7 April 2021 COB. Consequently, the day of change of the rights related to the shares (ex-dividend date) is set to 6 April 2020. From this day onwards, the person acquiring the shares will not have the right to receive dividends for the financial year 2020. Dividends shall be disbursed to the shareholders on 9 April 2021.

All relevant documents associated with the Group’s general meeting (including the Notice on calling the general meeting, draft resolutsions, the Group’s Consolidated Annual Report for 2020, Supervisory Board Report 2020, Procedure of Electronic Voting and other documents presented to the general meeting) have been presented in more detail on LHV home page https://investor.lhv.ee/en/general-meetings/#24.03.2021), where the minutes of the meeting shall also be made available at the latest 7 days after the general meeting.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, and LHV Kindlustus. LHV employs over 540 people. LHV’s banking services are used by 269,000 clients, and pension funds managed by LHV have 179,000 active clients. LHV’s UK branch offers banking infrastructure to 140 international financial services companies, via which LHV’s payment services reach clients around the world.