So far, LHV UK has offered banking services to over 200 fintech companies such as Paysafe, Blockchain, Currencycloud, Coinbase, and Wise. It planned to expand to servicing SMEs next year, but this transaction enables LHV UK to accelerate its strategy.

Under the deal, 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.

Erki Kilu, CEO of LHV UK, comments: “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."

Bank North raised £20 million last year - including a £4.45 million investment from LHV UK parent LHV Group - but failed in its bid to raise the required capital to achieve a full UK banking licence.

The sale 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.

Ron Emerson chair of Bank North, says: “Following a competitive and independently managed process, we are pleased that we were able to agree on this transaction with LHV UK, which not only preserves 20 jobs and the Bank North legacy but also ensures that SMEs will get much-needed finance from a progressive and well-funded provider.”

Onece the transaction is complete, Manchester will become LHV UK’s third hub in the UK. In addition to its London headquarters, LHV UK opened its second hub in Leeds for its development and engineering teams earlier this year.

LHV UK is currently waiting for regulatory approval for its UK banking license, submitted in February this year.