LHV Bank, Estonia’s largest domestic financial group, is opening a branch in London this month, after having obtained the necessary approvals from the UK’s financial regulator.
In a statement, LHV said it was planning to open the London outpost in order to enable it to better look after financial services providers with its products and services.
It added: “Existence of the UK branch will allow LHV Bank to join [the pound sterling system of payments] and provide financial intermediaries with real-time payments service, in both euros and pounds.
“The role of LHV is to be the link between new generation fintech services and banking infrastructure.”
A spokesperson added: “LHV is opening a branch in London in order to service existing and new customers that are financial intermediaries, mainly fintechs. We are establishing the branch to provide customers with sterling and euro payments in the future.
“Against the backdrop of Brexit, many banks are thinking about withdrawing from London, but we are eager to swim against the current. London is one of the most important financial centres in the world [for] fintech companies.”
The bank, originally known as Lõhmus, Haavel & Viisemann when it was founded in 1999 as an investment business, is based in Tallinn, Estonia’s capital and largest city, and has more than 135,000 customers, and looks after the pensions of more than 176,000.
In addition to its fintech client base, it is known for its expertise in incorporating technology, such as blockchain, in its delivery of banking products and services. And perhaps for this reason, its new London base is located at 1 Old Street Yard, near the Old Street roundabout (pictured above, on a map of London), sometimes referred to as the “Silicon Roundabout” because of a concentration of tech companies located in the area.
Heading up the London operation as manager will be Andres Kitter, who is a member of the LHV Bank’s management board, and who has so far overseen the servicing of financial service providers by the bank. LHV Bank is understood to be currently looking to recruit customer service specialists as well as compliance and money laundering prevention specialists for its new outpost.
‘Financial intermediaries need…us’
In a statement accompanying the announcement of the bank’s plans to open a London office, LHV Bank chief executive Erki Kilu said servicing financial service providers had already evolved into an important part of the bank’s business.
“We are an influencer bank, we strive to contribute to the development of financial services,” he added.
“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), which entered into force this year.
“In order to offer new solutions, the financial intermediaries need banking services; that means us.”
The bank said that it plans to start servicing financial intermediaries in London “by the end of this year”, once it has set up all the necessary facilities.
Already a direct member of the Euro Payments System, in addition to being a participant in the Instant Payments System working group, LHV Bank says it intends to “open necessary accounts in the Bank of England, and join the Pound Payments Systems at the earliest opportunity”.
LHV Bank intends to mark the occasion of its UK branch opening on 19 March, with a reception and panel discussion, on the subject of whether “global cities will prevail over countries”, as part of a fintech conference scheduled to take place next week in London.