In relation to the milder than estimated effects of the coronavirus crisis, LHV Group’s financial results exceed what was forecast previously, which is why
Pursuant to the updated financial plan, this year, the consolidated revenues of
Key indicators | Updated FP 2020 | 2019 results | Change YoY | Previous FP 2020 | Change compared to previous plan | |
Financial results, EURt | ||||||
Total revenue | 95,395 | 73,818 | 21,577 | 87,316 | 8,079 | |
Total expenses | 43,749 | 39,266 | 4,483 | 44,773 | -1,024 | |
Impairment losses on loans | 11,950 | 3,209 | 8,740 | 19,357 | -7,408 | |
Earnings before taxes | 39,697 | 31,342 | 8,354 | 23,185 | 16,512 | |
Net profit | 32,611 | 27,092 | 5,519 | 19,231 | 13,380 | |
Business volumes, EURm | ||||||
Loans | 2,227 | 1,687 | 540 | 1,806 | 421 | |
Deposits | 3,301 | 2,701 | 600 | 2,985 | 316 | |
Assets under management | 1,531 | 1,374 | 157 | 1,454 | 78 | |
Key ratios | ||||||
Cost / Income ratio | 45.9% | 53.2% | -7.3% | 51.3% | -5.4% | |
ROE (pre tax) | 16.6% | 16.2% | 0.4% | 10.2% | 6.4% | |
Capital adequacy | 17.3% | 18.0% | -0.6% | 17.6% | -0.2% |
The updated financial plan also considers the effect of the purchase of the Danske Bank corporate and municipal loan portfolio, and therefore, regarding LHV business volumes, estimates the loan portfolio to grow by 32% this year, and deposits to grow by 22%. Pursuant to the updated plan, the volume of managed funds will increase by 11% this year.
Compared to the financial plan disclosed at the peak of coronavirus crisis, the Group will earn 70% more in net profit this year, reaching
In the updated plan, the company’s cost/income ratio and the return on equity have improved as the growth of business volumes increase revenues; at the same time, expenses have slightly gone down compared to the previous plan. LHV’s capitalisation and liquidity are still at a strong level.
Comment by
"LHV can only be as successful as our clients. In terms of economic sectors, the situation is different, but the economy as a whole has fared better than what was initially forecast. We have continued with decisions that support our clients and with our local and open credit policy. Through this, our loan portfolio has continued to grow during the crisis as well, and loan discounts have remained significantly lower than what was forecast. The updated forecast takes into account the interest revenues added by the purchase of the Danske portfolio from the beginning of October. The forecast has estimated the capitalisation of LHV Pank and LHV Kindlustus during the current year. In the case of LHV Varahaldus, operating revenues have been taken into account; a potential success fee would be added outside of the forecast, since estimating the inputs that are the basis for the success fee has a high error rate. Besides business in
LHV Communication Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee
Attachment
LHV Group updated Financial Plan 2020-Q4 EN
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