UK-based LHV Bank has been authorised as a credit institution by the Prudential Regulation Authority (PRA).
This milestone achievement allows LHV Bank to accept customer deposits and transition from operating under the temporary permissions regime as a branch of Estonian retail bank AS LHV Pank (LHV Pank) to being a fully authorised and regulated bank by both the PRA and the Financial Conduct Authority (FCA).
The decision to pursue a UK banking licence was made in 2021, and LHV submitted its application in March 2022. Following a close collaboration with the PRA and the FCA, the bank has secured the licence in just over a year, demonstrating its commitment to regulatory compliance.
LHV Bank’s officials said that added in addition to their existing banking services and SME lending activities, they plan to start accepting retail deposits later in 2023 and expand their banking solutions offering to ecommerce businesses, maintaining the same level of convenience, reliability, and security for clients.
LHV Bank connects the traditional banking sector with cutting-edge financial services, delivering cloud-native payments, and banking infrastructure. Operating in the UK since 2018, LHV is a member of all major UK and EU payment schemes and, as such, its extensive offering includes real-time multi-currency payments, current and savings accounts, acquiring, indirect scheme access, open banking, and FX solutions, which are used by over 200 fintechs like Airwallex, Currencycloud, Truelayer, and Wise.
LHV Bank has made investments in technology, implementing core-banking solution, developing cloud-native services, and building in-house payments modules and API solutions tailored to fintech clients.
With an emphasis on reliability and security, LHV Bank employs prudent risk and liquidity management practices. LHV’s diverse service offerings and broad customer base have helped to de-risk its revenue streams.
As a result of the banking licence, the company is currently undergoing the business transfer process to move all operations to the new bank. After the transfer, the UK branch of LHV Pank will be deregistered, and LHV Bank will continue to operate as a separate entity. The underlying strong financial performance of the business line means that LHV Bank’s financial plan projects profitability by the end of its first year of operations.
With its banking licence, LHV Bank plans to expand its offering to a broader audience. This includes accepting retail deposits, which will be available later in 2023, as well as introducing banking services to ecommerce businesses. LHV Bank is fully capitalised, and customer deposits are protected under the FSCS up to a limit of GBP 85,000.
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