Kraken moves to acquire $181 million European bank in major push beyond crypto trading

Kraken's parent company, Payward, has agreed to acquire a European bank as it expands beyond cryptocurrency trading into traditional financial services.

On Oct. 14, the company announced a definitive agreement to purchase Saldo Finance Oy, a Finnish holding company that owns Lithuania-based Saldo Bank.

The acquisition would give Payward control of a licensed European banking institution with approximately €163 million ($181 million) in assets, offering deposits, lending and payment services across multiple markets.

The transaction, whose financial terms were not disclosed, is expected to close in 2027, subject to regulatory approval.

It marks another step in Payward's effort to build a financial services platform that can handle traditional money and digital assets while reducing its dependence on external banking partners.

Kraken targets European banking expansion with Saldo acquisition

Saldo Bank is an established but relatively small European financial institution whose operations have expanded considerably in recent years.

According to its 2025 audited financial statements, the bank held €162.9 million in assets at the end of December, up about 22% from €133.6 million a year earlier.

Its net loan portfolio increased to €113.5 million from €95.4 million, while retail deposits climbed 24% to €136.9 million.

The bank also reported its first annual profit of approximately €962,000 in 2025, reversing a €2.4 million loss the previous year. Its operating profit before impairment losses rose to €10.4 million, though credit impairment charges absorbed most of it.

These figures show that Payward is acquiring an operating lending business with an established deposit base, although its balance sheet remains modest compared with major European financial institutions.

More importantly, Saldo's existing infrastructure provides a foundation for expanding Payward's financial products across Europe without establishing a new banking operation from scratch.

The institution currently operates in Lithuania, Finland, Sweden, and Germany, and is authorized to expand into the Netherlands. It provides retail term deposits across its operating markets, consumer lending in three countries, and business loans in Lithuania and Finland.

Its credit card business is already operating in Finland, with a Swedish expansion planned for 2027. Saldo also provides embedded lending services that allow fintech companies to offer credit products through its infrastructure.

Payward plans to build on these capabilities by introducing interest-bearing deposits, business and consumer lending, card issuance, and SEPA payment services for European customers.

The acquisition could also support a broader banking-as-a-service business, allowing other financial technology companies to access regulated financial infrastructure through Payward.

Payward co-CEO Arjun Sethi said the transaction forms part of the company's strategy to establish deeper financial relationships with customers. Sethi said:

“We believe whoever owns that relationship earns the right to serve everything around it.”

The strategy builds on Payward's efforts to gain greater control over financial infrastructure.

In March, its Wyoming-chartered subsidiary, Kraken Financial, secured a limited-purpose Federal Reserve master account, providing direct access to US payment infrastructure.

The company also holds an electronic money institution license from the Central Bank of Ireland and says its existing banking operations have originated more than $2 billion in loans.

Meanwhile, Payward expanded its payment capabilities in July by acquiring Reap, a stablecoin-focused company offering card issuation and cross-border transaction infrastructure.

The Saldo acquisition would extend these capabilities into regulated European deposit-taking and lending, potentially allowing Payward to offer banking, cryptocurrency trading and payment services through a more integrated platform.

The firm stated:

“We’re not acquiring a bank to be a bank. We’re acquiring the infrastructure to let Payward serve European clients the way a primary financial institution should: one place to hold assets, move them freely, and put them to work.”

European regulatory approval remains key to banking expansion

However, Payward's ability to implement its plans depends on securing regulatory approval and complying with the restrictions attached to Saldo's specialized banking license.

Under Lithuanian banking rules, specialized banks can accept deposits, issue loans, and provide payment services but face restrictions on certain investment activities.

Consequently, ownership of Saldo would not automatically authorize Payward to integrate every cryptocurrency or investment product into the acquired bank.

The transaction will also require supervisory scrutiny of Payward's financial position, management arrangements, and compliance systems.

Beyond regulatory approval, Payward would assume responsibility for maintaining a banking balance sheet, including credit risk, deposit liabilities, and capital requirements.

Saldo's latest financial statements showed total equity of €16.3 million at the end of 2025, with a common equity Tier 1 capital ratio of 14.9% and a total capital adequacy ratio of 19.8%.

These capital measures are key as Payward considers expanding the bank's loan book and other services after the acquisition.