Landshypotek Bank (LHB) Q3 2024 earnings summary

Executive summary

• Market leader in agriculture and forestry lending with a 23% share, focusing on sustainability and low-risk operations.

• Lending activity and growth increased across all customer segments, with lending volumes reaching record highs and a focus on expanding the customer base and digital capabilities.

• Operating profit for January–September 2024 was SEK 392 million, down from SEK 510 million year-over-year, mainly due to lower net interest income as margins were pressured by falling interest rates.

• Credit quality remains strong, with positive net credit losses and no significant deterioration in the loan portfolio.

• The bank is investing in technology, sustainability, and new product offerings, including lending for tenant-owner apartments.

Financial highlights

• Net interest income for Q3 2024 was SEK 269m, with YTD 2024 at SEK 811m, both down from the previous year due to reduced deposit margins.

• Operating profit for Q3 2024 was SEK 149m, with YTD 2024 at SEK 392m, down from SEK 510m YTD 2023.

• Loans to the public increased to SEK 107.1bn, while deposits from the public decreased to SEK 28.0bn.

• Credit losses remain low, with YTD 2024 showing SEK -4.1m in reversals.

• Cost/income ratio improved to 0.48 in 2023; costs rose in 2024 due to higher IT expenses.

Outlook and guidance

• Plans to start offering mortgage lending to condominium owners in Q4 2024.

• Management expects continued growth in lending as interest rates fall and market activity increases.

• Margins are expected to remain under pressure until the interest rate cutting cycle concludes.

• Focus on growing with new and existing customers, especially in retail (agriculture and residential).

• Continued integration of ESG into strategy and risk management, with a climate transition plan in development.