LHV Group updated the long-term financial forecast

25.07.2019

LHV Group updated the long-term financial forecast

The Supervisory Board of AS LHV Group approved the updated financial forecast for 2019–2023 pursuant to which, the forecast for the growth of LHV’s business volumes has been significantly increased.

In addition to the results of 6 months of 2019, the updated forecast has also considered the purchase transaction of Danske’s loan portfolio, increased loan volumes and deposits, and the effects of the lower Euribor. The estimated profit for 2019–2023 will increase by a total of EUR 7.3 million; the change in profit in different years will remain in the 10% range compared to the existing forecast.

According to the updated forecast, LHV Group will earn a net profit of EUR 25.6 million in the current year, which is EUR 1.8 million less than what has previously been estimated. The increased costs compared to the previous forecast are related to one-off expenses regarding the purchase of Danske’s private loan portfolio and the effects of more expensive temporary financing involved via deposit platforms for conducting the transaction. The increased expenses are partially covered by loan volumes that increased by EUR 122 million, to which Danske’s private loan portfolio in the amount of EUR 447 million will be added at the end of November.

In 2020, the profit will reach EUR 39.2 million, which is EUR 2.8 million higher than what was previously forecast. The effect of the lower Euribor will be covered by higher interest income from the loan portfolio that has increased by EUR 653 million (at that, the volume of loans issued in 2020 has been increased by EUR 84 million in the forecast) and the decrease in costs due to issuing covered bonds which will replace the deposits involved from deposit platforms.

In 2021, the profit will reach EUR 50.0 million, which is EUR 3.6 million higher than what was previously forecast. The effect of the lower Euribor will be covered by higher interest income from the loan portfolio that has increased by EUR 731 million (at that, the volume of loans issued in 2021 has been increased by EUR 78 million in the forecast) and the lower financing cost of the private loan portfolio.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group's key subsidiaries are LHV Pank and LHV Varahaldus. LHV employs nearly 420 people. LHV’s banking services are used by over 179,000 clients, and pension funds managed by LHV have more than 177,000 active clients.

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