Atom Bank set for first year of profit after three quarters in the black

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City Editor

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The £100m in equity will go towards ramping up its challenge to the high street banks.
Durham-based Atom Bank is likely to IPO in the near future.

Digital lender Atom Bank is on track to post its first full year of profits after revealing today it had spent three quarters in the black in the full year to March.

The Durham-based bank, founded by chief executive Mark Mullen in 2014, notched underlying pre-tax losses for the year of £2m, a £34m improvement over the previous year.

Income at the bank grew by over 200 per cent, with costs increasing by just 6 per cent, after a surge in the size of the firm’s loan book across both business and residential lending. Atom’s total book reached £3.3bn, up from £2.7bn in the previous year.

Mullen said today it had been a “year of significant progress” from the firm as he underlined the role of lenders amidst a cost of living crunch.

“Whilst it might have been unfashionable at some point to focus on the fundamentals of banking and the relationship between savers and borrowers, we think there has never been a more important time to play the role of a responsible lender,” he said.

“As we all search for growth and support those who invest to grow, there is a key role for banks to play; after all, leverage makes the world go round.”

Mullen accused high street lenders of ramping up the cost of borrowing in the midst of an inflationary crisis, describing it as “disappointing but hardly surprising”. 

Business lending at the firm hit record levels as the book ballooned to £1bn, up from £0.7bn the previous year, having felt the lift of the government’s CBILS scheme. 

The results come after reports in May that Atom was angling for a New York listing via a merger with a special purpose acquisition company (SPAC) headed up by Wilbur Ross, Donald Trump’s former commerce secretary.

A listing on New York’s markets would be a major snub for London which has looked to promote itself as a premier listing destination for fintech and tech firms.

Mullen declined to comment on the destination for the IPO in an interview with the Times, but said it was a “pretty difficult time to float” more broadly.