North East challenger bank Atom bank says it is poised to post a profit for the first time since its launch, following a year of financial progress.
The Durham based business, the UK’s first app-based bank, said that after posting its first month of operating profit in the its first quarter of the financial year, Atom recorded operating profits for the remaining three quarters of the year ended March 1 2022.
It said a focus on efficiency as it saw income growth led to it narrowing its underlying operating loss significantly to £2m, from 2021’s loss of £36m. Operating costs have remained under control, and while Atom’s income grew by over 200% in the year, running costs increased by only 6%.
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It said income growth came through increases in its loan book, across both business and residential lending, with Atom’s total loan book reaching £3.3bn, up from £2.7bn in 2021. The organisation also saw a record-breaking year for business lending, growing the book to £1bn from £0.7bn, having participated in the Government’s CBILS scheme.
Residential mortgages and savings also grew substantially. It expanded its residential lending assets to include near-prime retail mortgages and grew its on-balance sheet residential mortgage lending to £1.5bn, up from £1bn.
The company also launched its Instant Access Saver in 2021, which pays rates of 1.35%, with balances increasing to £1.3bn during the year from £0.7bn). Total deposit balances at year end stood at £3.2bn, a billion more than a year earlier. Since the year end that total has grown above £3.5bn.
Atom also raised £117m in new capital during the year, which has been used to fund income generating lending. Meanwhile, the company said the introduction of a four-day week with no loss of pay in November 2021 has so far been a resounding success.
It said employees are reporting being happier and healthier, with increased employee engagement and decreased sickness and attrition levels. Atom said customer satisfaction has increased since the change, with Atom’s Trustpilot score hitting 4.7/5.0 this year, up from 4.6/5.0, and its Net Promoter Score reached +87 from +76.
Mark Mullen, chief executive officer at Atom, said: “It has been a significant year of progress for Atom. We have continued to grow our franchise and we’re on the cusp of achieving sustainable full year profitability, proving that it is possible to do so while providing both customers and employees with a better deal.”
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