LHV UK plans to acquire Bank North’s SME lending business as it expands across Yorkshire

LHV UK will acquire Bank North’s entire £17.9m loan book and technology systems for managing the loans.

The transaction will also see 20 employees transfer to LHV UK and cooperation agreements with commercial brokers, LHV UK said in a statement.

The statement added: “The company will not need any third-party financing for the transaction. Once the business and assets transfer is complete, LHV UK will continue to operate the same business model. The transaction is scheduled to complete later this month, and the proceeds will be used by Bank North to settle creditors as part of its solvent wind-down process.”

“The company has placed high importance on the regional development of the UK’s fintech sector; in addition to its London headquarters, LHV UK opened its second hub in Leeds for its development and engineering teams earlier this year.

"Another hub will further expand the talent pool to recruit new staff and allows LHV UK to continue to grow its business presence in the UK, creating more opportunities for the company’s employees.”

Bank North has built technology which streamlines the lending process. It can approve loans to local businesses as much as ten times faster than its competitors, LHV UK said.

LHV UK said it will enhance the existing technology and plans to integrate it with its modular and cloud-based core banking platform.

Erki Kilu, the chief executive of LHV UK, said: “The demand for SME lending is well proven, and this acquisition enables LHV UK to accelerate our plans to expand to servicing SME companies.

"By utilising the experience of LHV UK’s executive management in the SME lending space and our access to funding and capital, which is essential when running a loan business, we can quickly build on the solid foundation laid by Bank North’s team.

“By combining the skills and experience of the two companies, we increase LHV UK’s technical capacity, create value and will be in a position to better deliver to the UK SME market.

" The SME lending business will remain regional through our offices in London and Manchester, where it will continue to benefit from local expertise and established relationships with the brokers, who’ve already delivered a proven substantial loan pipeline to Bank North.”

Ron Emerson CBE, Chair of Bank North, said: “On behalf of the board, I would like to express our appreciation for the support that we have received from the LHV Group. As an investor, they have conducted themselves impeccably and have demonstrated real empathy for SMEs and a genuine understanding of the Bank North lending proposition and vision. “