Kraken’s European Banking Bet Faces a Tough Balance Sheet Test

Kraken’s parent company Payward is preparing to enter European banking through its acquisition of Saldo Bank, but the Lithuanian lender’s financial statements show that the transaction involves more than securing a banking licence. Saldo has expanded its deposit base, increased lending and returned to profitability. At the same time, overdue loans have risen sharply, and its regulatory capital ratios have declined as the business has grown. These developments create an immediate question for Payward: how much additional capital and credit-risk capacity will be needed to turn a relatively small European lender into a broader financial services platform?