Estonia-headquartered LHV Group is applying for a new banking licence in the UK, to separate its LHV Pank business activities in Estonia from those it already has in the UK.

The new bank will be established as a 100 per cent subsidiary of the group and will be headquartered in London, with “substantial growth” targeted for the coming years, said LHV.

LHV said separated business activities will “simplify” compliance with regulatory and supervisory requirements and allow “better overview” over both entities.

The domestic operation will remain focussed on Estonian retail customers and the UK-based bank will continue to cater to financial intermediaries, selling services mainly to large business clients such as other financial institutions, corporations and startups.

“LHV believes that a dedicated bank in the UK, which will focus on providing banking services to international payment intermediaries, will better serve the needs of its international FinTech clients in the long term,” said the group.

LHV has been operating in the UK since the beginning of 2018, when the bank received a license to establish a UK branch.

The company currently provides banking infrastructure to more than 130 FinTech, payments and virtual assets companies, predominantly offering settlement services such as accounts, payments, card payments, currency conversion and other services. It has attracted unicorns like TransferWise, Coinbase, Trustly, Paysafe and Airwallex as clients.

Andres Kitter, head of LHV’s UK operations, said: “LHV is committed to further developing its existing business in the UK and we believe that a clear separation between its retail operations and London-based banking services division will benefit our FinTech clients.

“We understand 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," he added.

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