LHV Bank has been granted consumer credit permission by the UK’s Prudential Regulation Authority (PRA) following a six-month application process.

The approval enables LHV Bank to expand its retail product offering, including plans to launch overdraft facilities for current account customers in 2026.

The bank said the move represents a "significant regulatory milestone" for LHV Bank in the UK.

Consumer credit permissions are not granted lightly, it continued, adding that approval requires regulators to be satisfied that firms can manage credit risk "safely and consistently" across economic cycles.

As part of the application process, LHV Bank was subject to detailed scrutiny of its end-to-end credit frameworks, financial crime controls, operational resilience, capital adequacy and board-level oversight.

“Receiving consumer credit permission from the PRA is a strong endorsement of the robustness of our risk management and governance frameworks," said Erki Kilu, chief executive, LHV Bank. "These permissions are only granted where regulators have confidence that a bank can manage credit safely, at scale and over the long term."

Kilu added: “This outcome reflects substantial investment in our control environment, our people and our culture. It allows us to broaden our UK retail proposition while remaining firmly focused on prudent growth and responsible lending.”

Kris Brewster, director of retail banking, said with overdrafts a core feature of a full-service current account, the permission enables the bank to develop a "competitive product" designed around "customer needs and transparency."

"Our focus will be on delivering overdrafts that are simple, fair and aligned with responsible lending principles when we launch in 2026," he continued.

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