AS LHV Group has finalized a £ 4.455million investment in Bank North (formerly B-North) and acquired a 9.9% stake in the company after Bank North successfully closed a financing round of ‘ Series A ‘and has been licensed for banking by the UK Prudential Regulatory Authority (Authorized with Restrictions -‘ AWR ‘).
In addition to AS LHV Group, pension funds managed by AS LHV Varahaldus have also invested in Bank North. Other participants in the ‘Series A’ funding round included figures such as Skipton Building Society, Channel 4 Ventures and the Greater Manchester Combined Authority. The round will help Bank North to further develop its technology and provide working capital to launch its lending business.
LHV Group’s £ 4.455 million investment is funded by Tier 1 Common Equity. In the short time, the investment reduces the capital reserves of the LHV group, but since the profitability targets of Bank North are similar to those of the LHV group, the results will be positive as a stand-alone investment. The investment has been factored into LHV Group’s updated financial plan for 2021. Following the investment, Madis Toomsalu, CEO of LHV Group, will be elected as a member of the Supervisory Board of Bank North.
With the obtaining of the AWR banking license, the financial company Commercial and Northern Ltd created in 2018 now becomes Bank North. It is developed to serve the UK business lending market as a local bank catering primarily to the needs of SMEs.
Bank North’s model is unique, based on seamlessly integrated cloud-native banking technology that powers a network of regional modules, where experienced bankers will deliver committed finance to businesses up to ten times faster than the industry standard. sector in the UK. A decentralized model makes it possible to adapt to each customer’s situation, decided locally and delivered locally – differentiating it from the UK’s highly centralized and standardized banking system.
Bank North plans to open the doors of its first group of loans in Manchester later this year, ahead of a managed rollout across the UK. It will start lending in October 2021. More information available: https://b-north.co.uk/.
Comments from Madis Toomsalu, CEO of LHV Group:
“With an experienced team and high growth ambitions, Bank North is firmly set to go into business and aims to disrupt the UK £ 150 billion SME lending market. We took this investment opportunity to expand LHV’s presence in the UK and to exchange information between LHV and Bank North. LHV’s mission is better access to financial services and capital and we see clear parallels between Bank North’s plans and LHV bank’s journey so far. Bank North’s plan to provide the necessary credit to local SMEs more efficiently than its competitors, combining the best technological solutions with relationship banking is a business with high growth potential, as LHV proves. This service is sought after by UK businesses as they recover from the effects of the pandemic.
LHV Group is the largest national financial group and capital provider in Estonia. The main subsidiaries of the LHV group are LHV Pank, LHV Varahaldus and LHV Kindlustus. LHV employs more than 620 people. LHV banking services are used by 290,000 clients, the pension funds managed by LHV have 174,000 active clients and LHV Kindlustus protects a total of 132,000 clients. LHV’s UK branch provides banking infrastructure to 160 international financial services companies, through which LHV’s payment services reach customers around the world.
LHV Communication Manager
Telephone: +372 502 0786
Email: [email protected]