Atom Bank swings to first profit as juicy rates tempt in savers
Atom Bank has notched its first full year of operating profit today after jacking up its savings rates and nearly doubling its customer base over the past year.
In its full year accounts this morning, the Durham-based fintech bank reported a £4m operating profit for the year – up from a loss of £2m 12 months ago – as its customer base nearly doubled to 224,000.
The update marks the first full year of profitability for the bank co-founded by former HSBC and First Direct executive Mullen and Metro Bank founder Anthony Thomson after nine years spent in the red.
In a statement today, Mullen said it had been an “important” year for the firm.
“We’ve grown strongly, kept our costs tight and delivered our first annual operating profit,” he added. “We’ve also passed on more than 70 per cent of the Bank of England’s base rate increases to our savers but only 70 per cent of them to our Standard Variable Rate mortgage borrowers.”
Bigger banks have been in the firing line this year for ramping up borrowing costs and inflicting pain on mortgage holders while failing to pass on the same hikes to savers. However, Atom has been near the front of the pack in passing on rates.
Savings deposits at the firm reached £6.6bn over the past 12 months, more than double the previous year, as customers looked to cash in.
Atom’s net interest margin, the difference in what it pays out on savings products and charges on lending, meanwhile stayed broadly flat on the previous year at 2.84 per cent.
The profitability may add to anticipation over the firm’s float on the public markets after a series of delays when markets were roiled by war in Ukraine and inflation.
The float of Durham-based Atom, which was linked with a New York listing last year, has been a topic of speculation as policymakers look to convince more homegrown tech firms to come to market.
Mullen publicly backed London as the firm’s home for an IPO for the first time in an interview with City A.M. earlier this year. However, the bank’s biggest shareholders private equity group Toscafund and Spanish bank BBVA will hold significant sway over the eventual destination.
Investors have pumped some £550m in equity capital into the firm since it foundation and Mullen told the Times today that the firm may raise more capital from private investors before any IPO.