AS LHV Group finalised an investment of £4.455 million in Bank North (previously
B-North) and acquired a 9.9% share in the company after Bank North closed a
successful 'Series A' funding round and was granted its banking licence by the
UK Prudential Regulatory Authority (Authorised with Restrictions - 'AWR').
In addition to AS LHV Group also pension funds managed by AS LHV Varahaldus
invested in Bank North. The other participants in the 'Series A' funding round
included the likes of Skipton Building Society, Channel 4 Ventures and the
Greater Manchester Combined Authority. The round will support Bank North in
further developing its technology as well as delivering operating capital to
kick off its lending activities.
LHV Group's investment size of £4.455 million is funded from core tier 1
capital. In the short time frame the investment lowers LHV Group's capital
buffers, but as Bank North's profitability targets are similar to those of LHV
Group, the results will be positive as a stand alone investment. The investment
has been taken into account in LHV Group's updated Financial Plan for 2021.
Following the investment, Madis Toomsalu, CEO of LHV Group, will be elected a
member of Bank North's supervisory board.
With receiving the AWR banking licence the financial company Commercial and
Northern Ltd established in 2018 now becomes Bank North. It is being developed
to serve the UK business lending market as a local bank catering mainly to the
needs of SME-s.
Bank North's model is unique, built on seamlessly-integrated, cloud-native
banking technology, which powers a network of regional pods, where experienced
bankers will deliver committed finance to businesses up to ten times faster than
the industry standard in the UK. A de-centralised model allows for tailoring to
the circumstances of each customer, locally decisioned and locally delivered -
differentiating it from UK's heavily centralised, standardised banking system.
Bank North plans to open the doors of its first lending pod in Manchester later
this year, before a managed roll-out across the UK. It will start lending in
October 2021. More information available: https://b-north.co.uk/.
Comments by Madis Toomsalu, CEO of LHV Group:
"With an experienced team and high growth ambitions Bank North has a strong
readiness to commence business activities, and aims to disrupt the £150 billion
UK SME lending market. We seized this investment opportunity in order to broaden
LHV's presence in the UK and interchange insight between LHV and Bank North. The
mission of LHV is a better access to financial services and capital and we see
clear parallels between plans of Bank North and the journey of LHV bank so far.
Bank North's plan to provide necessary credit to local SME-s more efficiently
than competitors, combining the best technological solutions with relationship
banking is a business of great growth potential, as proven by LHV. This service
is sought after by UK businesses at the time of recovering from the effects of
the pandemic."
LHV Group is the largest domestic financial group and capital provider in
Estonia. LHV Group's key subsidiaries are LHV Pank, LHV Varahaldus, and LHV
Kindlustus. LHV employs over 620 people. LHV's 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 offers
banking infrastructure to 160 international financial services companies, via
which LHV's payment services reach clients around the world.
Priit Rum
LHV Communication Manager
Phone: +372 502 0786
Email: priit.rum@lhv.ee (mailto:priit.rum@lhv.ee)
|