LHV Group (LHV1T) investor relations material

Executive summary

• Q3 net profit was €37.5m, up 43% YoY and 52% QoQ; results included an €8.9m impairment release, principally linked to a large Estonian exposure.

• Net interest income rose 24% YoY and 10% QoQ; Q3 net interest margin was 2.8%.

• 9M net profit was €81.9m, down 5% YoY but €3.6m ahead of plan; management expressed confidence in meeting full-year targets.

Financial highlights

• Q3 net operating income was €80.1m, up 10% YoY; operating expenses were €43.4m, up 12%, and impairment movements were positive €8.9m.

• Q3 net interest income was €68.8m and fee income €16.8m; fee income rose 15% QoQ.

• 9M net interest income rose 9% to €190.6m and fees increased 3% to €46.1m; operating expenses rose 14% to €132.6m.

• Net loans reached €5.95bn, up 14% YoY; customer deposits were €7.74bn, up 4%, and assets under management increased 12% to €1.82bn.

• Liquidity-bond portfolio revaluation losses partly offset interest income; Q3 other income included a €5.5m loss, while valuation losses are expected to unwind as bonds mature.

Outlook and guidance

• Q3 results were ahead of plan; management cited loan demand and interest income ahead of budget and confidence in meeting financial-plan targets.

• Gradual NIM improvement is expected after Q3’s 2.8%; loan balances were €36m ahead of plan, while deposits were €584m below plan following deliberate reductions in higher-cost balances.

• UK year-end lending target is £1bn, requiring ~£118m net lending growth in Q4, subject to pipeline conversion and redemptions.

• UK Q4 priorities include disciplined lending growth, credit management, higher Banking Services revenue, cost control and funding aligned with lending needs and maturities.

• Dividend policy remains a 25%–50% payout range; management expects a payout near the upper end, subject to the March shareholder decision.