LHV UK will acquire Bank North’s entire £17.9 million loan portfolio and loan management technology systems.
The transaction will also see the transfer of 20 employees to LHV UK and cooperation agreements with commercial brokers, LHV UK said in a statement.
The statement adds: “The company will not require any third-party financing for the transaction. Once the business and asset transfer is complete, LHV UK will continue to operate the same business model. The transaction is expected to be finalized later this month, and the proceeds will be used by Bank North to settle creditors as part of its solvency liquidation process.
“The company has placed great emphasis on the regional development of the UK 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 broaden the talent pool to recruit new employees and allow LHV UK to continue to develop its commercial presence in the UK, creating more opportunities for the company’s employees.”
Bank North has developed technology that streamlines the lending process. It can approve local business loans up to ten times faster than competitors, LHV UK said.
LHV UK said it will enhance existing technology and plans to integrate it into its modular, cloud-based core banking platform.
Erki Kilu, Managing Director of LHV UK, said: “The demand for SME loans is well established, and this acquisition allows LHV UK to accelerate our expansion plans to serve SMEs.
“Using LHV UK’s senior management experience in SME lending and our access to finance and capital, which is essential when running a lending business, we can quickly build on the solid foundations laid by the Bank North team.
“By combining the skills and experience of both companies, we are increasing LHV UK’s technical capability, creating value and will be able 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 broker relationships, who have already provided a large and proven lending pipeline to Bank North.”
Ron Emerson CBE, Chairman of Bank North, said: “On behalf of the Board, I would like to express our gratitude for the support we have received from LHV Group. As an investor, they behaved beyond reproach and demonstrated real empathy for SMEs and a genuine understanding of Bank North’s lending proposition and vision. “