Multitude Bank expands footprint with stake acquisition in Lea Bank

Multitude Bank has also agreed to acquire an additional 8.7% of Lea Bank, pending approval from the Norwegian Financial Authority and the Swedish Financial Authority. Upon receiving this approval, Multitude Group is projected to become the largest shareholder in Lea Bank ASA, holding an approximately 18.6% ownership stake.

This investment, amounting to around EUR 15 million, supports Multitude’s growth strategy and reflects its commitment to expanding through organic growth, partnerships, and acquisitions. The acquisition aligns with Multitude’s goals due to the complementary nature of Lea Bank's product offerings and opens avenues for further strategic collaboration. It is anticipated that this transaction will yield attractive financial returns for Multitude in terms of dividend yield and income from the associated company. The purchase will be funded entirely through Multitude Bank's available liquidity.

Lea Bank, established in 2016, operates primarily in two segments: consumer loans and deposit products. It offers consumer loans in Norway, Sweden, Finland, and Spain, and provides deposit products to customers in Norway, Germany, Spain, Austria, and France.

The regulatory environment

The regulatory environment for fintech companies in Europe is characterised by a complex framework designed to ensure consumer protection, maintain financial stability, and promote innovation. In Norway and Sweden, regulatory bodies such as the Financial Supervisory Authority (Finanstilsynet) and the Swedish Financial Supervisory Authority (Finansinspektionen) oversee fintech operations, establishing rules that govern everything from licencing to capital requirements. These authorities aim to foster a competitive landscape while ensuring that new entrants comply with stringent financial regulations similar to those faced by traditional banks.

Recent trends in the regulatory landscape indicate a shift towards more supportive frameworks for fintechs, particularly in Norway and Sweden. The introduction of the European Union's Digital Finance Strategy aims to improve the EU's global competitiveness and improve the regulatory framework for digital finance. In Norway, the implementation of the new Payment Services Act and the Securities Trading Act has facilitated a more flexible regulatory environment for fintech companies, allowing them to innovate while adhering to necessary compliance standards. Similarly, Sweden has embraced regulatory sandboxes, which allow fintechs to test their products in a controlled environment, thereby promoting innovation while minimising risks.