Payment infrastructure provider LHV has applied for a UK banking licence application to separate business activities in Estonia and the UK.
LHV currently operates in the UK through LHV Bank’s UK branch, however this division will ensure better compliance with regulatory and supervisory requirements, according to a statement released by the company. This disassociation will also help highlight financial results and value propositions that could emerge from the new bank for potential investors.
LHV Bank’s UK branch has 200 financial intermediary customers that include Wise, Monese, Coinbase, Trustly, Paysafe, Airwallex, TransferGo, Blockchain and Currencycloud that service over 10 million end-customers worldwide.
In addition to offering settlement services such as accounts, payments, card acquiring, FX, as a direct member of both instant euro and pound payment settlement systems, LHV also offers real-time payments in both major currencies in Europe through their API.
The banking application is subject to regulatory approval by the PRA and FCA and can take up to 12 months if the application is deemed not complete. After obtaining the banking licence, LHV will transfer its business from the LHV Bank UK branch to LHV UK Limited.
Erki Kilu, CEO of LHV UK said: “It took exactly a year to prepare the materials needed to apply for the banking licence. We have been in constant communication with the regulators and promptly addressed any recommendations and feedback. In addition to working on the application, we have also grown our team in London to 25 people, with new people joining every week. If we take into account the 55 people in LHV's Tallinn office who are directly involved in supporting LHV’s UK business, it is already a fairly large company.
“LHV UK will invest £8.5 million this year into people, technology and risk control systems. We will also open our second UK office in Leeds, where we plan to hire IT specialists and engineers. The complete separation of business activities also includes staffing and technology. LHV UK will use modern outsourced technology and cloud-native solutions like modular banking platform Tuum, payment processing platform Form3, anti-money laundering and compliance solution Salv, CRM system Salesforce, etc.”