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

At the end of 2025, LHV Group’s deposit and loan portfolio volumes both demonstrated very strong growth. In 2025, LHV Group’s revenue dynamics were influenced by changes in the interest rate environment throughout the year, which put pressure on interest income, while strong competition in the deposit market increased interest expenses. Strong growth in customer activity and fee and commission income helped to partially offset the decline in net interest income. In Q4, net interest income already showed growth compared to previous quarters.

In 2025, LHV Group earned total net income of EUR 304.8 million, which is 10% less than in the previous year. Net interest income decreased year-on-year to EUR 235.1 million (–14%), while net fee and commission income increased to EUR 63.3 million (+5%). Consolidated expenses of the Group amounted to EUR 159.3 million in 2025, increasing by 8% compared to the previous year. LHV Group’s consolidated net profit for 2025 totalled EUR 117.0 million, which was EUR 33.3 million lower than in 2024 (–22%).

Among subsidiaries, the largest contribution to profit came from AS LHV Pank, which earned a net profit of EUR 107.1 million in 2025. LHV Bank Limited recorded a net profit of EUR 5.5 million, AS LHV Varahaldus EUR 4.1 million, and AS LHV Kindlustus EUR 2.5 million. The return on equity attributable to the shareholders of the Group was 16.0% in 2025.

By the end of 2025, LHV Group’s consolidated assets increased to EUR 10.23 billion, growing by 17%, i.e. EUR 1.50 billion year-on-year. In Q4, total assets increased by 7%.

LHV’s consolidated loan portfolio increased by EUR 913 million in 2025 to EUR 5.47 billion (+20%). In Q4, the loan portfolio grew by 4%, i.e. EUR 231 million, of which corporate loans increased by EUR 163.9 million and retail loans by EUR 67.3 million.

The Group’s consolidated deposits increased by EUR 1.22 billion during the year to EUR 8.13 billion (+18%). In Q4, deposits grew by EUR 682 million, i.e. 9%, including an increase of EUR 309.4 million in retail customer deposits.

The aggregate volume of funds managed by LHV increased by EUR 144 million in 2025, reaching EUR 1.70 billion (+9%). In the final quarter of the year, fund volumes increased by EUR 82 million (+5%).

The volume of payment processing related to financial intermediary customers totalled 85.6 million payments in 2025, which is 15% more than in 2024 (i.e. 74.8 million payments). In Q4, 24.4 million such payments were processed, representing a 14% increase compared to Q3.

In Q4, the Group’s consolidated net income increased by 9% quarter-on-quarter to EUR 78.8 million. Compared to the same period last year, net income was 7% lower. Net interest income amounted to EUR 59.9 million in Q4, increasing by 8% quarter-on-quarter. Net fee and commission income totalled EUR 18.3 million, increasing by 20% quarter-on-quarter. Consolidated operating expenses in Q4 amounted to EUR 42.4 million, which is 10% higher than in Q3.

In Q4 of 2025, AS LHV Group’s consolidated net profit amounted to EUR 30.8 million, increasing by EUR 4.5 million (+17%) compared to Q3. AS LHV Pank earned a net profit of EUR 27.7 million in Q4. LHV Bank Ltd earned EUR 2.3 million, AS LHV Varahaldus EUR 2.7 million, and AS LHV Kindlustus EUR 100,000 in net profit during the quarter. The return on equity attributable to the shareholders of the Group was 16.1% in Q4.

The end of 2025 was supported by strong growth in business volumes and an increase in fee and commission income. Good portfolio quality allowed for a reduction in loan impairment charges. Despite the stronger performance at the end of the year, the full-year financial plan was not met as planned, with net income falling short by 2.6% and net profit by 6.5%.

The number of LHV Pank customers increased by 8,800 in Q4, reaching 492,000 customers. Over the year, the customer base grew by a total of 36,000 customers, i.e. more than 8%. Net interest income increased by 2% quarter-on-quarter to EUR 50.1 million, while net fee and commission income grew by 11% to EUR 12.9 million. Net income related to the financial intermediaries segment and shared with LHV Bank amounted to EUR 26 million. Previously, profit sharing was reported within net interest income and net fee and commission income. Following regulatory changes, it is now presented as a separate line item. Banking services continued to be used actively at the end of the year, and lower net interest income was offset by higher fee and commission income. In 2025, net interest income declined by 20% year-on-year to EUR 206.3 million, while net fee and commission income increased by 4% to EUR 46.9 million.

Lending activity accelerated in the final months of the year and in Q4 LHV Pank’s loan portfolio increased by EUR 109 million, reaching EUR 4.68 billion by year-end. Among this, the mortgage loan portfolio exceeded EUR 1.5 billion. Portfolio quality remained strong and loan impairment charges were reduced by just over EUR 2 million. LHV Pank’s deposit volume increased by EUR 324 million during the quarter, reaching EUR 6.96 billion at year-end.

In 2025, LHV Pank launched a modern and comprehensive solution, LHV Premium. In addition, several changes were made during the year to the terms and conditions of investment products to make investing even more accessible and beneficial for customers, and further enhancements were implemented to increase the security of banking services. In December, the international banking magazine The Banker named LHV the Best Bank in Estonia for 2025. In addition, the leading international financial magazine Euromoney named LHV Pank the Best Bank in Estonia for 2025. At the end of 2025, research company Dive conducted a banking sector service quality survey, in which LHV Pank achieved the highest result. Furthermore, Instar conducted an employer expectations and employer brand survey last year, which revealed that in 2025 LHV Pank was the most preferred employer among Estonia’s working-age population and economics students.

The loan portfolio of LHV Bank operating in the United Kingdom continued to grow strongly. The portfolio increased by EUR 122 million quarter-on-quarter, reaching EUR 782 million by year-end. Loans amounting to approximately EUR 118 million have been approved by the credit committee but have not yet been disbursed. The quality of the loan portfolio has remained strong. LHV Bank’s deposits increased by EUR 285 million, reaching EUR 1.29 billion. The volume of payments from financial intermediary customers reached a record level by year-end.

Key business achievements in 2025 included loan portfolio growth of EUR 434 million and deposit growth of EUR 581 million. The UK bank increased net income by 24% year-on-year, reaching EUR 55.5 million by year-end. Net profit remained at a similar level compared to the previous year, amounting to EUR 5.5 million, exceeding the financial plan. Last year, LHV Bank launched a comprehensive retail banking offering and became the first bank in the UK to join the real-time euro payments system. The Sunday Times recognised LHV Bank with the ‘Best Places to Work’ award.

The number of customers of LHV Varahaldus making regular monthly contributions reached 142,000 by year-end. LHV’s second and third pillar pension funds delivered the best rates of return in the market last year. Net profit increased by EUR 2.5 million year-on-year to EUR 4.1 million, significantly exceeding the financial plan. Assets under management grew by 9% year-on-year, largely driven by the strong rate of return delivered by LHV funds last year. At the beginning of 2025, the LHV Euro Bond Fund was launched, restructuring was carried out within existing pension funds, and all actively managed LHV pension funds were rebranded. During the year, the external sales channel was closed, and future sales activities will focus on digital channels and telephone sales.

The moderate growth of equity markets in Q4 was also reflected in the performance of LHV pension funds. During the quarter, the rates of return of the LHV pension funds Ettevõtlik, Julge, and Tasakaalukas amounted to 2.8%, 2.7%, and 1.9%, respectively. The conservative fund Rahulik increased by 1.5%. Pensionifond Indeks rose by 4.0%.

LHV Kindlustus met its planned sales targets at year-end. However, Q4 was weaker in terms of net profit compared to the previous quarter, largely due to increased claims. Despite the weaker year-end performance, LHV Kindlustus managed to double its full-year net profit, reaching EUR 2.5 million and thereby meeting its financial plan target. Gross written premiums increased by 12% year-on-year to EUR 10.6 million, outperforming overall market growth. Last year, sales of products distributed through LHV channels also increased by 23%.

In Q2 and Q3 of 2025, the European Central Bank (ECB) conducted an on-site supervisory review at LHV Group, aimed at verifying the compliance of the capital adequacy calculation as of the end of 2024 with regulatory requirements. The formal conclusion of the supervisory process is scheduled for February 2026. This was the first on-site audit of this kind for LHV. During the audit, it emerged that in several areas the interpretations of applicable regulations by LHV Group and the ECB differed. The supervision focused on CRR2 (the second version of the Capital Requirements Regulation), which was replaced by CRR3 (the third version of the Capital Requirements Regulation) as of 2025.

This regulatory change is significant, as in several areas where CRR2 was not explicit, LHV had already applied interpretations introduced under the newer CRR3. During the audit, it became evident that under CRR2, the more detailed interpretations of the newer regulation were not yet permitted, and the older regulation should have been interpreted more conservatively. In addition to differences in interpretation, the ECB also identified procedural weaknesses, particularly related to additional verification of results.

As a result of the audit, the ECB concluded that as at the end of 2024, LHV Group should have reported risk-weighted assets that were EUR 244 million higher, and capital adequacy should have been 20.41% instead of 21.92%. Even at the adjusted level, LHV Group met all applicable external and internal capital adequacy requirements. LHV Group implemented all changes identified during the audit where it was clear that the interpretation of the ECB differed from previous practice. The final clarifications were received in October 2025, and the corresponding changes were implemented in November. As a result, LHV Group is confident that capital adequacy as at the end of 2025 has been calculated correctly and in compliance with applicable regulatory requirements.

LHV Group’s capital position remains strong. During the year, LHV Group issued EUR 80 million of Tier 2 subordinated bonds, EUR 50 million of AT1 subordinated bonds, and EUR 60 million of senior unsecured bonds. LHV Pank issued EUR 300 million of covered bonds. Moody’s Ratings upgraded the ratings of AS LHV Pank’s covered bond programme and covered bonds to the highest level, Aaa. Moody’s affirmed AS LHV Pank’s long-term bank deposit rating at A3 (with a positive outlook) and upgraded LHV Group’s senior unsecured debt rating to Baa2 (with a positive outlook). The ratings confirm LHV’s strong financial position and capitalisation and reflect expectations of strengthening creditworthiness.

Comment by Mihkel Torim, the Chairman of the Management Board at LHV Group:

“Despite the challenging interest rate environment in the first half of the year, we concluded 2025 with a strong Q4. Our interest income returned to growth, and the increase in fee and commission income driven by high customer activity was significant. Although full-year profit fell short of the financial plan by 6.5%, Q4 was strong, during which nearly 9,000 new customers were added in Estonia and both our deposit and loan portfolios grew rapidly.

The contribution of our other subsidiaries was also outstanding, demonstrating the broad-based strength of the Group. LHV Varahaldus delivered the best rate of return in the market and significantly exceeded its financial plan. Particularly rapid growth was recorded by LHV Bank operating in the United Kingdom, where our loan portfolio doubled year-on-year and the number of retail customers reached 5,000 by year-end. LHV Kindlustus also doubled its profit.

I would like to thank our customers, employees, and investors for their trust, which is also reflected in the numerous local and international recognitions we received last year.”

AS LHV Group’s reports are available at: https://investor.lhv.ee/en/reports/.

To present the financial results, LHV Group will host a webinar via Microsoft Teams. The virtual investor meeting will take place on 10 February at 12.00. The presentation will be held in English. Please register here.

LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank Limited. The Group employs approximately 1,200 people. As at the end of December, the services of LHV Pank are being used by 492,000 customers, the pension funds managed by LHV have 106,000 active customers, and LHV Kindlustus protects a total of 231,000 customers. LHV Bank Limited, a subsidiary of the Group, holds a banking licence in the United Kingdom and provides banking services to international financial technology companies, as well as loans to small and medium-sized enterprises.

Investor relations
Sten Hans Jakobsoo
Head of Investor Relations and Corporate Development
Email: stenhans.jakobsoo@lhv.ee

Media and communications
Paul Pihlak
Head of Communications
Email: paul.pihlak@lhv.ee

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