By Oliver Smith on Tuesday 3 November 2020
A new bank, kind of.
LHV Group, the payments infrastructure provider and Estonian retail bank, is planning on separating the two elements of its business.
Today LHV said it is planning on applying for a new banking licence in the UK in order to split its UK banking services and payment infrastructure arm from its more ‘traditional’ retail bank in Estonia.
The ‘new bank’ will be a subsidiary of LHV and will continue to serve the same fintechs like TransferWise, Coinbase, Trustly, Paysafe and Airwallex, albeit with a hugely simplified regulatory and compliance structure.
“We believe that a clear separation between its retail operations and London based banking services division will benefit our fintech clients, therefore we have decided to found a new bank in the UK that will have a singular focus of servicing them,” said Andres Kitter, head of LHV’s UK operations.
“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.”
Based on the creation of this new subsidiary, LHV says the ‘new bank’ would already be very profitable, turning a net profit of £4.4m this year from servicing some 13m payments with a payment volume of over £45bn from its 130 customers.
LHV has operated in the UK since 2018, and the move is not said to be related to Brexit.