Unaudited financial results of LHV Group for Q4 and 12 months of 2025

Core Insights - LHV Group experienced strong growth in its deposit and loan portfolios by the end of 2025, despite facing challenges from the interest rate environment and competition in the deposit market [1][4][5] Financial Performance - Total net income for LHV Group in 2025 was EUR 304.8 million, a decrease of 10% compared to the previous year [2] - Net interest income fell to EUR 235.1 million, down 14% year-on-year, while net fee and commission income rose to EUR 63.3 million, an increase of 5% [2] - Consolidated expenses increased by 8% to EUR 159.3 million, leading to a consolidated net profit of EUR 117.0 million, which is 22% lower than in 2024 [2] Asset and Deposit Growth - By the end of 2025, consolidated assets reached EUR 10.23 billion, reflecting a 17% increase year-on-year [4] - The consolidated loan portfolio grew by EUR 913 million to EUR 5.47 billion, marking a 20% increase [4] - Consolidated deposits rose by EUR 1.22 billion to EUR 8.13 billion, an 18% increase [5] Customer Activity and Payment Processing - The number of LHV Pank customers increased by 8,800 in Q4, totaling 492,000 customers by year-end [10] - Payment processing for financial intermediary customers reached 85.6 million payments in 2025, a 15% increase from 2024 [6] Quarterly Performance - In Q4 2025, consolidated net income increased by 9% quarter-on-quarter to EUR 78.8 million, although it was 7% lower than the same period last year [7] - Net interest income in Q4 amounted to EUR 59.9 million, an 8% increase from Q3 [7] - The consolidated net profit for Q4 was EUR 30.8 million, a 17% increase compared to Q3 [8] Subsidiary Contributions - AS LHV Pank was the largest contributor to profit with a net profit of EUR 107.1 million in 2025 [3] - LHV Bank Limited and AS LHV Varahaldus also contributed positively, with net profits of EUR 5.5 million and EUR 4.1 million, respectively [3] Regulatory Developments - The European Central Bank conducted an on-site supervisory review of LHV Group, with findings indicating discrepancies in capital adequacy calculations [19][20] - LHV Group's capital position remains strong, having issued various bonds and received upgrades in credit ratings from Moody's [22] Recognition and Achievements - LHV Group received multiple accolades in 2025, including being named the Best Bank in Estonia by The Banker and Euromoney [13] - The company also achieved significant growth in its subsidiaries, particularly in the UK market, where LHV Bank's loan portfolio doubled year-on-year [24]