LHV Group (LHV1T) Q4 2024 earnings summary

Executive summary

• Q4-24 net profit reached 36.3 EURm, up from Q3 and year-over-year, with record-high business volumes and strong growth in loans (+426 EURm) and deposits (+624 EURm).

• Financial plan targets were met or exceeded, especially in loans, deposits, and payments, despite a less favorable interest rate environment.

• Management highlights better-than-expected volume and profit growth, meeting updated 2024 profitability goals.

• LHV named best bank in Estonia and expanded sponsorships in sports.

Financial highlights

• Q4-24 net interest income: 67.4 EURm; total net income: 86.5 EURm; net service fee income rose 18% sequentially to 17.3 EURm.

• Total operating expenses increased to 40.8 EURm (+4.9 EURm quarter-over-quarter).

• Impairment losses/provisions fell sharply to 1.1 EURm from 7.3 EURm in Q3-24.

• Loans portfolio (net) at 4,552 EURm (+426 EURm); deposits at 6,910 EURm (+624 EURm quarter-over-quarter).

• Cost/income ratio rose to 48.0% (from 43.0%); ROE at 22.0%.

Outlook and guidance

• Focus remains on growing loan portfolio, attracting retail deposits, and developing the UK mobile bank.

• Direct debits and debit cards to be introduced in the UK mobile bank in Q2-25, with a marketing campaign planned.

• Continued emphasis on efficiency and maintaining strong loan quality.

• Updated 2024 financial plan increased profitability goals by a third; all targets were met despite faster-than-expected interest rate declines.