Lhv Group As · OMXTSE:LHV1T
Lhv Group As — Debt Investor Presentation (August 2021)
32 slides from Lhv Group As's debt investor presentation, Aug 24, 2021
Slide 1: LHV Group
LHV Group 24 August 2021 AS LHV GROUP TARTU MNT 2, TALLINN 6 802 670 INFO@LHV.EE LHV.EE
Slide 2: Disclaimer
Disclaimer By attending this meeting where this presentation is made, or by reading the presentation slides or by accepting delivery of this document, you agree to be bound by the following limitations. This presentation has been drawn up by AS LHV Group (‘The Company’) purely for informational purp
Slide 3: Speakers today
Speakers today Madis Toomsalu, Chief Executive Officer of LHV Group Meelis Paakspuu, Chief Financial Officer of LHV Bank Kadri Haldre, Head of Treasury of LHV Bank 3
Slide 4: Executive Summary
LHV Group Executive Summary • LHV Group was established in 1999 and has demonstrated over 20 years of profitable growth • The Group’s businesses include retail and corporate banking, banking services to financial intermediaries, asset management, and non-life insurance. LHV Bank is the largest busin
Slide 5: Indicative Termsheet LHV Group HoldCo Senior 4NC3
Indicative Termsheet LHV Group HoldCo Senior 4NC3 Issuer LHV Group LHV Group Issuer Rating: Baa3 (positive); LHV Bank Deposits Rating Baa1 (positive) (Moody’s); the bonds Rating are expected to be rated Baa3 by Moody’s Status Senior Unsecured, Unsubordinated, RegS (MREL eligible) Launch Date [•] [Au
Slide 6: Business environment
Business environment
Slide 7: LHV Home Markets: Estonia Overview
LHV Home Markets Overview ESTONIA Member of EU, NATO and OECD Estonia in world indexes: • #18 Ease of doing business • #14 World Press Freedom Index • #18 Corruption Perception Index • #5 PISA education tests 2018 Tallinn What makes Estonia stand out • Highest number of unicorns per capita • Female
Slide 8: COVID-19 effects offset by fiscal stimulus and surge in consumption
COVID-19 effects offset by fiscal stimulus and surge in consumption Estonia's GDP growth Government debt and budget deficit 20% 10% 100% • COVID-19 related restrictions had an 5% 75% impact on Estonia’s economy (GDP 10% fell by 2.9% in 2020) but the impact 0% 50% was less pronounced than in Europe 0
Slide 9: LHV's market share in Estonia as of March 2021
LHV’s market share in Estonia as of March 2021 Corporate loans Household loans 13% • The aim is to keep 8% • Market share of new growing the loan portfolio sales of household at a pace higher than the loans is at 14%. At 10,7 10,3 market average, whilst EURb portfolio level LHV EURb ensuring high qu
Slide 10: LHV Group
LHV Group
Slide 11: Overview LHV Group
LHV Group Overview LHV Group* Profit: 39.8 EURm 100% 100% 65% 100% LHV Bank LHV Asset Management LHV Insurance LHV UK Banking Fund Management Insurance incl. UK Branch License obtained in Application process ongoing for Profit: 34.6 EURm Profit: 8.3 EURm December 2020 separate credit institution lic
Slide 12: Share Information
LHV Group Share Information Overview: Top 5 shareholders Shareholding structure as of 06/2021: Regulated market Nasdaq Baltic Main list Rain Lõhmus Shareholders 13,787 Security short name LHV1T 23.1% Countries represented 33 Andres Viisemann Estonian residents 78.9% Total Ambient Sound Estonian resi
Slide 13: Key Highlights for the six months ended June 2021
LHV Group Key Highlights for the six months ended on 30 June 2021 Loans to Deposits Total assets No of customers* Ratio 5.9 EURbn 490 thous 48.8% Net Stable Funding Capital Adequacy Net loans Ratio Ratio 2.4 EURbn 145.6% 18.6% Deposits Cost to Income Ratio NPL ratio** 4.9 EURbn 51.4% 0.8% Assets und
Slide 14: Credit Rating: Moody's Issuer Rating of Baa3 (positive)
LHV Group Credit Rating: Moody’s Issuer Rating of Baa3 (positive) LHV Group Issuer Rating LHV Bank Deposit Rating Baa3 (positive) Baa1 (positive) • Rating reflects LHV Group’s principal role as a bank holding • Moody’s highlights strong digital capabilities, which result in good company for its main
Slide 15: Business Units
LHV Group Business Units LHV Bank LHV Pension Funds Third largest bank in Estonia The best long-term rate of return Real estate, private equity and direct investments in addition Long-term goal is to become the largest and most profitable to public markets bank in Estonia Focus on efficiency, innova
Slide 16: Business Volumes and Key Financial Results
LHV Group Business Volumes and Key Financial • The Group has shown a track record of Results and volumes, EUR thous 2018 2019 2020 6m 2021 profitable growth over the past years Net profit 27,189 27,092 39,846 24,332 Total assets, EURm 1,677 3,032 4,971 5,862 • The number of customers and customer Lo
Slide 17: Capital Requirements as of June 2021
LHV Group Capital Requirements as of 30 June 2021 • LHV is classified as other systemically Capital adequacy requirements Capital structure important institution („O-SII“) 20% EURm 18.60% 318 • The Central Bank of Estonia 300 temporarily lowered in May 2020 the O-SII buffer 75 required systemic risk
Slide 18: Compliance with MREL Requirements: HoldCo Issuance Strategy
Compliance with MREL Requirements HoldCo Issuance Strategy Issuance Capital / MREL AT1 LHV HoldCo Tier 2 Group HoldCo Senior Issuance Funding OpCo LHV LHV Asset Deposits, LHV Bank Covered Insurance Management bonds • Single Point of Entry strategy envisaged by LHV's resolution plan, with LHV Group a
Slide 19: Compliance with MREL Requirements: Envisaged Issuance
Compliance with MREL Requirements Envisaged Issuance to exceed targets comfortably • MREL-TREA Target is 21.42% (from 2024) 25.44% and Interim Target 19.08% (from 2022). Buffer after the issuance and calling of MREL-LRE Target is 5.91% (from 2022). No existing bonds: 402bps 21.93% subordination requ
Slide 20: Balance Sheet Structure
LHV Group Balance Sheet Structure EURm Structure of assets EURm Structure of liabilities and equity 8,000 • LHV has a straightforward balance 8,000 sheet. Assets are made up of loans 5,862 5,862 6,000 6,000 4,971 and liquidity. Funding is mainly 4,971 raised from deposits, which are 4,000 4,000 3,03
Slide 21: Liquidity
LHV Group Liquidity Loans / deposits ratio NSFR • LHV is running a conservative 100% 200% approach to liquidity risk. LCR and 153% 153% 146% 148% NSFR levels are comfortably 75% 65% 150% 63% above regulatory minimums and 54% 49% internal tolerance levels. 50% 100% 25% 50% • In addition to retail and
Slide 22: LHV Bank High Quality Credit Portfolio
LHV Bank High Quality Credit Portfolio EURm Loans on grace period Provisions / NPL • During the first wave of COVID-19, 300 LHV joined the voluntary 200% moratorium offering payment 225 151% holidays for both private and 150% 130% corporate customers for up to 12 150 89% months 100% 71% 75 50% • The
Slide 23: ESG Goals
LHV Group ESG Goals Environmental Social & Governance We have signed the UN Principles for Responsible Banking We support cultural and economic development of local and plan to meet all requirements for signatories communities Contributing to achieving the goals of the Paris Climate We stand for the
Slide 24: Business units
Business units
Slide 25: LHV Bank Business Volumes and Key Financials
LHV Bank Business Volumes and Key Financials Financial results, EURt 2018 2019 2020 6m 2021 • Business volumes of LHV Bank have gone Net interest income through a period of rapid growth over the 39,021 47,915 69,046 44,069 Net fee and commission income past few years 11,103 12,808 18,385 13,179 Othe
Slide 26: LHV Bank Business Volumes
LHV Bank Business Volumes Total revenue Deposits 57 478 • Revenues are well diversified 10 between the three main business lines (retail banking, corporate 1 banking, services to financial 23 1,954 4947 54 EURm intermediaries) EURm 6m 2021 06/2021 2,457 • The Bank is deposit funded mainly 20 through
Slide 27: LHV Asset Management AUM and NAV change
LHV Asset Management AUM and NAV change EURm LHV AUM and customers cust. (th.) Passive funds and LHV Green Pension • LHV pension funds are market 1,600 200 100% Fund NAV change leaders in terms of long-term returns Thousands Millions 175 80% 1,200 150 75% 106 59% • LHV funds focus more than 800 1,57
Slide 28: LHV Asset Management Business Volumes and Key Financial
LHV Asset Management Business Volumes and Key Financial • LHV is Estonia’s second largest manager Financial results, EURt 2018 2019 2020 6m 2021 of compulsory pension funds (so-called 2nd Total revenue 13,942 12,869 14,966 4,617 pillar defined contribution pension scheme) Total expenses 5,823 6,097
Slide 29: Appendix
Appendix
Slide 30: Management
LHV Group Management Madis Toomsalu • CEO of LHV Group • Chairman of the Supervisory Boards of AS LHV Pank, AS LHV Varahaldus and AS LHV Kindlustus. Member of the Supervisory Board of LHV Finance. Chairman of the Board of LHV UK • Chairman of the Remuneration Committee in LHV Group and Nominating Co
Slide 31: Investor Information: Outstanding Subordinated Bonds and MREL eligible Instruments
Investor Information Outstanding Subordinated Bonds and MREL eligible Instruments LHV Group SNP LHV Group SNP LHV Group 2028 LHV Group 2030 LHV Group LHV Group (private (private T2 bond T2 bond 8.00% AT1 bond 9.50% AT1 bond placement) placement) CRR2 compliance Tier 2 capital Tier 2 capital AT1 capi
Slide 32: Contact details
Madis Toomsalu CEO madis.toomsalu@lhv.ee Meelis Paakspuu CFO meelis.paakspuu@lhv.ee Kadri Haldre Head of Treasury kadri.haldre@lhv.ee