LHV Pank received a precept and a fine from the Estonian FSA
The Estonian Financial Supervision and Resolution Authority (FSA) has issued a precept to AS LHV Pank as a result of supervisory proceedings in 2022 and also issued a 900,000 euro fine for misdemeanour. LHV Pank agrees with the supervisional remarks.
The FSA conducted an on-site inspection to assess the compliance of LHV Pank’s financial intermediaries business line’s control systems. The supervisory proceedings identified deficiencies regarding the assessment and management of money laundering and terrorist financing risks; as well as in the solutions for onboarding and monitoring of clients to faultlessly fulfil the due diligence measures set for the bank. The remarks included a lack of resources and shortcomings in the fulfilment of obligations.
According to Kadri Kiisel, the Chairman of the Management Board of LHV Pank, LHV was engaged in improving the risk control system of the financial intermediaries business line even before the beginning of the inspection. As of today, LHV has eliminated a large part of the 22 shortcomings identified by the FSA. Work will continue until the end of this year.
"The development of risk control is a continuous work for the bank that has been in focus side by side with the growth of the Financial intermediaries business line. We are treating the supervisory observations with appropriate priority and commitment. Among other things, we have implemented changes to the assessment and management of risk and significantly increased the team active with due diligence. The inspection results showed that the FSA’s expectations are at a high level and there is a need for improvement of indicated processes and procedures, so that we could more thoroughly know our customers as well as the activities of their end customers," Kiisel commented.
LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank, LHV Varahaldus, LHV Kindlustus, and LHV Bank. The roup companies employ over 970 people. As of July, LHV’s banking services are being used by 404,000 clients, the pension funds managed by LHV have 127,000 active clients, and LHV Kindlustus protects a total of 161,000 clients. LHV Bank, a subsidiary of LHV Group, holds a banking licence in the UK and provides banking services to international financial technology companies, as well as loans to small and medium-sized enterprises.
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