Listed Estonian financial services provider AS LHV Group earned €4.3 million in net profit in August, which included €4.1 million earned by AS LHV Pank and €0.4 million earned by its asset management arm AS LHV Varahaldus.
In July, AS LHV Group earned a net profit of €4.5 million. LHV continued to actively grow its business volumes in August and this was visible, above all, in the addition of a large number of new clients. More than 3,500 new clients joined the bank, while LHV Varahaldus obtained nearly 1,300 new active pension customers, LHV informed the stock exchange.
In addition to client activity, the monthly result was influenced by decreased expenses and reduced provisions, but also by the operating performance of funds. For example, over the past few months, LHV Pension Fund Green has been the most productive among the actively managed funds in Estonia.
Deposits grew by €65 million during the month, despite a decline of €39 million in the more expensive deposits raised via deposit platforms. The loan portfolio increased by €11 million during the month, mostly as a result of an increase in retail loans. Loan portfolio growth was influenced by more active loan repayment by clients. The volume of funds managed by Varahaldus grew by €27 million during the month. The volume of units transferred into funds managed by LHV reached a record high.
As a result of the better-than-expected economic situation, LHV has outperformed its spring financial plan in terms of the volumes of deposits, loans and funds, the bank says. In terms of net profit, the company is ahead of its financial plan by €8.0 million.
An update of the financial plan will be decided upon at the beginning of October when the first grace periods granted in spring are going to end.
In August, LHV made public its intention to raise €25-35 million in new capital by means of an issue of subordinated bonds in September.
LHV is one of the "big-five" high street banks in Estonia. The others are the Scandinavian-owned SEB and Swedbank, Estonian-owned Coop Pank and Luminor, which is owned by a Blackstone-led private equity funds consortium, plus two more Scandinavian banks, Nordea Bank and DNB.
Editor: Roberta Vaino, Andrew Whyte