The UK Financial Conduct Authority in February granted LHV Bank the approval to open a branch in the United Kingdom. LHV has now registered the bank, and opened its branch in London.
The Estonian Financial Supervisory Authority approved the move at the end of last year. LHV Bank wants to develop its financial service providers business line, and the UK branch now makes it possible to join pound payment systems and provide financial intermediary services with real-time payments in both euros and pounds.
With the move, the banks is positioning itself as a choice provider for all those companies who are developing new solutions in the fintech and financial services sector.
CEO Erki Kilu said earlier this year that these intermediary services have already evolved into an important part of the bank's business. Kilu sees LHV as what he calls an "influencer bank" that wants to actively contribute to the development of new tech in the financial sector.
"During the last six years, we have seen a rapid growth in the volume of payment services, and more growth can be predicted, taking into account the impact of the European Payment Services Directive (PSD2) on the financial sector that entered into force this year," Kilu said in a press release. "In order to offer new solutions, the financial intermediaries need banking services, and that means us."
The bank is currently busy hiring for its new London branch office. The UK branch will be managed by Andres Kitter, who serves as a member of the Management Board of LHV Bank and has so far overseen the servicing of financial service providers.
In addition to the branch manager, LHV will recruit customer service specialists and new employees covering compliance and money laundering prevention. Where new software is needed, the London branch will be able to use increased resources at LHV's Tallinn headquarters, Kitter said.
LHV aims to the end of 2018 to start generating additional revenue in the UK. A greater increase in revenue is planned for the following years. In its latest update the bank hasn't yet set the year when it expects the UK branch to become profitable, but expects this to happen within the next few years.
Editor: Dario Cavegn