Atom bank poised to profit from low-cost model that focuses on banking fundamentals

18 July 2022

  • After its first monthly operating profit in Q1 FY22, Atom delivered three further consecutive quarters of operating profit.

  • Underlying operating loss narrowed to £2m - a £34m improvement over the previous year.

  • Income grew by over 200%, with costs increasing by just 6%, reflecting Atom’s focus on automation and cost management, whilst continuing to offer great rates to both savers and borrowers.

Atom bank, the UK’s first app-based bank, has reported a year of significant financial progress, as it continues to focus on serving the needs of savers and people who want to own their own homes or build their own businesses.

After recording its first month of operating profit in Q1 FY22, Atom has recorded operating profits for the remaining three quarters of the year to 31st March 2022.

Net interest margin (NIM) rose significantly to 127bps (compared to 54bps in 2021) driven by lending growth across the residential and business portfolio. A sharp focus on efficiency coupled with impressive income growth has resulted in Atom narrowing its underlying operating loss significantly to £2m (2021: £36m).

Operating costs have remained under close control, demonstrating the efficient scalability of Atom’s lean and digitally native business model, which aims to make the experience of borrowing and saving simpler, faster and better value than anyone else. Consequently, while Atom’s income grew by over 200% in the year, running costs increased by only 6%.

Substantial growth in lending and deposits

The growth in income is attributed to increases in the loan book across both business and residential lending, with Atom’s total loan book reaching £3.3bn (up from £2.7bn in FY21)

Atom had a record-breaking year for business lending, growing the book to £1bn (from £0.7bn in FY21) having participated in the government’s CBILS scheme. To date, all business lending has been fraud free and was achieved with a table-topping business customer Net Promoter Score of +88.

Residential mortgages and savings also grew substantially during the year. Atom 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 in FY21 and well over £3bn in total since launch).

Atom continues to offer better rates to savers. The Instant Access Saver (currently paying 1.35%), launched in 2021, has become a reliable source of low-cost funding, with balances increasing to £1.3bn during the year (2021: £0.7bn). Total deposit balances at year end stood at £3.2bn, a billion more than a year earlier (2021: £2.2bn). Today the total exceeds £3.5bn and continues to grow.

Atom successfully raised £117m in new capital during the year, with this capital predominantly being used to fund income generating lending. This year Atom plans to achieve full year profitability and continue its growth journey.

Focus on customer experience

Throughout the year Atom has continued to invest in automating business processes, ensuring that the bank moves towards profitability without compromising the customer’s experience.

This approach was evident in customer feedback, with Atom ending the financial year with a Trust Pilot score of 4.6/5 (currently at 4.7/5), an App Store rating of 4.7/5 and a customer Net Promoter Score of +87.

Four-day working week proving a success

Atom’s introduction of a four-day week with no loss of pay in November 2021 has so far been a resounding success. Over six months on, employees are reporting being happier and healthier, with increased employee engagement and decreased sickness and attrition levels. Crucially, and despite what critics may have predicted, customer satisfaction has increased since the change, with Atom’s Trustpilot score hitting 4.7/5.0 this year (2021: 4.6/5.0), and Net Promoter Score reaching +87 (2021: 76).

Low carbon emissions per employee

Atom engaged Alectro, independent carbon emissions experts, to review the emissions that Atom created and was responsible for in 2021. This included all scope one direct emissions, as well as scope 2 and 3 indirect emissions, including the impact that our suppliers have.

The review reported a total emissions level equivalent to 1.09t Co2e per FTE (full-time employee) for 2021. This level of emissions is very low compared to other banks and reflects how Atom’s digital app-based strategy, choice of partners and closely managed approach to costs is building a bank fit for the future.

Atom’s target is to maintain a market leading position of very low emissions per head, and is implementing a strategy of further reductions, substitution in favour of zero emissions partners and future investment that will allow the bank to meet its longer-term target of carbon neutrality and becoming carbon positive by 2035.

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.

“Banks are taking advantage of interest rate rises to widen their margins. They are not passing on increases in rates to savers, but more recently they have started to increase the cost of borrowing.

“With a cost-of-living crisis looming large, it’s disappointing, but hardly surprising, to see high street banks behave this way. It gives truth to the old adage that a banker is someone who gives you an umbrella when the sun is shining but takes it away when it starts to rain.

“Atom continues to offer customers a better deal, with exceptional service, because that, we feel, is the right thing to do. We are here to make the experience of borrowing and saving simpler, faster and better value than anyone else. In the last 12 months we have made remarkable progress on our journey towards realising that ambition.

“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. 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.”


For more details journalists can contact:

For Lansons

Ed Hooper 07783 387713

For Atom

Robbie Steel 07538 775701

About Atom bank

Atom bank launched operations in April 2016, offering market-leading Fixed Saver accounts and secured business lending for small and medium-sized enterprises (‘SMEs’), followed by its automated mobile mortgage proposition in December 2016. Atom launched an Instant Saver in September 2020. With a competitive rate, no short-term bonus, no limits on withdrawals and no minimum amount required at opening, the instant saver offers people much-needed flexibility while their cash works harder for them.

Atom is a mobile only and customer first bank. Based in the North East of England with a team of over 470 people, they’re here to do the right thing by their customers with outstanding levels of customer experience whilst taking the fight to the incumbents with exceptional levels of efficiency. At the heart of the bank is the app, with an award-winning customer support team on hand to help with any queries through phone, chat, email and social media.

The Atom executive team are highly experienced, having built and run some of the most well-respected banks in the UK. CEO Mark Mullen has 30 years’ experience in the sector and was previously CEO at the multi- award-winning telephone and internet bank first direct. The team is supported by a strong non-exec board, chaired by Bridget Rosewell CBE.