Estonian FinTech and payment services provider LHV Group has announced that it will seek a banking licence in the UK, in order to separate its UK activities from those of AS LHV Pank [sic] in Estonia.
According to an announcement from the company, a dedicated UK bank will
“focus on providing banking services to international payment intermediaries, [and] will better serve the needs of their international FinTech clients in the long term”.
The proposed new bank will be established as a 100 percent subsidiary of LHV Group and will be headquartered in London.
A separate business will simplify compliance with regulatory and supervisory requirements and allow better overview over both entities, says the announcement.
“The domestic operation remains focused on Estonian retail customers and the UK based bank will continue to cater to financial intermediaries, selling services mainly to large business clients, such as other financial institutions, corporations, and start-ups.”
LHV has been offering services within the UK since the beginning of 2018, when it was granted a licence to establish a UK branch.
It already provides banking infrastructure offerings to more than 130 FinTech, payments, and virtual assets companies, which predominantly offer settlement services, such as accounts, payments, card payments, and currency conversion.
According to LHV, its customers make more than 13 million payments a year with annualised gross-processed payment volumes exceeding £45 billion.
Andres Kitter, Head of LHV’s UK Operations, said,
“LHV is committed to further developing our existing business in the UK and we believe that a clear separation between its retail operations and London-based banking services division will benefit our FinTech clients.
“We understand that this process won’t happen overnight and it might take some time until the successful conclusion of the process. During this period we continue with the existing framework and there will be no impact to LHV’s current and future clients.”
Source: Press release