London, 24 April 2024 – Following its authorisation as a credit institution by the Prudential Regulation Authority in May 2023, LHV Bank has grown significantly. It has reported a profit after tax of £6.4 million in its first year of operation as a licensed bank, providing solid foundations for ambitious development plans in 2024.

Erki Kilu, CEO, LHV Bank said: “With a clear focus on customers with an entrepreneurial spirit, we have built products and services that are simple and transparent, underpinned by market-leading tech and excellent customer service. The relevance of our services is demonstrated in the results achieved in 2023 which now set us on a strong path for further growth in 2024.

LHV Bank’s Banking Services business has built a strong customer base which saw 2023 payment volumes increase to a record volume, processing 47.7 million payments by year end. Building on this success, at the start of 2023 LHV Bank broadened its offering to encompass SME lending and later in the year launched its personal savings accounts.

By year end LHV Bank’s SME loans business in the UK had built a £69 million lending portfolio, supporting commercial real estate investment entities and trading SMEs. The banking licence received in 2023 enabled LHV Bank to launch its first personal savings offering in September on the Raisin platform, followed by the Flagstone platform in December. Deposits with LHV Bank were at £207 million at the end of the year.

Other key developments in 2023 included the business transfer from UK branch, to its newly licenced entity. As a result, the GBP payment services associated with the Banking Services business moved to the new bank. This transition also included the transfer of associated GBP payment scheme memberships and related contracts.

At the same time, LHV Bank implemented a new cloud-based core banking system and successfully migrated customer data from the UK branch core banking system to the new LHV Bank system in the UK. This modern infrastructure simplified GBP payment systems integration for UK clients, improved reliability, and allowed for better scalability of its operations.

“Well capitalised and funded, we are now in a strong position to continue to build our propositions and extend customer support across all areas of our business”, concluded Erki Kilu. “In particular, LHV Bank will focus on increasing business volumes, transferring euro payments and launching our retail bank offering.”

The full report can be downloaded here.