UK’s newest bank opens Manchester office focused on SME lending
The UK’s newest licenced bank has opened a Manchester office.
LHV Bank is now operating in Chancery Place, in the city’s Brown Street. The opening boosts the bank’s sites from its London, Leeds and Tallinn, Estonia, operations.
Chancery Place will serve as the Northern office for the bank’s SME lending business line, offering commercial property and trading loans to UK SMEs, with values from £0.5m up to £5m.
LHV Bank entered the UK SME lending space last year by acquiring Bank North’s SME lending business and started issuing loans from the beginning of 2023.
Challenger and specialist banks now control 55% of the UK SME lending market, as per data from the British Business Bank. This underscores the growing demand among UK businesses for diverse financing avenues.
Erki Kilu, CEO of LHV Bank, said: “In a short space of time, our SME lending team has already built a solid loan book, positioning ourselves well for growth and highlighting the market demand for competitive loans in the region.
“According to LHV’s updated financial plan, we now project a £100m loan book by year-end, doubling the forecast from the start of this year.”
Central to LHV Bank’s lending strategy is its regional focus. This strategy drives economic growth in often underserved business hubs and ensures that the directors fully understand the specific needs of local borrowers.
In addition to providing funding to the Northern businesses from its Manchester base, LHV Bank intends to start issuing loans in the South East from its London headquarters.
At the beginning of this month LHV Bank transitioned to a new cloud-based loan system, allowing the SME lending team to quickly develop new lending products and processes.
In addition to the readily available capital from its parent company, LHV Group, the bank recently entered the personal savings arena with Raisin UK. The funds from saving deposits will be used to directly support the SME lending business.
LHV Bank also provides banking services to more than 200 global fintechs. It gained its UK banking licence in May and reported a £1.4m profit for the second quarter of 2023.