Atom bank, the UK’s first app-based bank, has announced its strongest ever financial results, driven by a significant increase in lending while keeping costs exceptionally low. Operating profit grew to £27m, a 600% increase on last year, with costs up just 4%, demonstrating the success of its efficient, sustainable, and scalable business model.
Atom delivered its first year of operating profit in FY23 and has continued to build on this success. Alongside significant growth in operating profit, the bank has now delivered its first full year of profit both before and after tax. Atom raised £100m from existing investors in November last year, using the additional capital to accelerate balance sheet growth and further scale the business. This raise, against a very challenging market backdrop, was a significant vote of confidence in Atom’s business model.
Despite this growth, administrative and general costs have increased by just 4%. Atom bank has maintained an outstanding customer service reputation, with 5-star ratings across Trustpilot, iOS, and Android, while delivering a customer Net Promoter Score (NPS) of 88+, the highest in Atom’s history.
Strong loan book and revenue growth saw a 31% increase in Atom’s net interest income to £100m, while net interest margin remained strong at 2.8%. The size of Atom’s loan book increased significantly by 39% to £4.1bn, with residential mortgage balances growing to £3.2bn, an increase of 55%. The digital lender delivered residential mortgage completions of almost £1.6bn, a 20% increase in a market that contracted by 25%. Atom maintains close control over credit quality, ending the year with just 0.3% of residential loans in arrears or subject to forbearance measures.
Atom has also seen significant growth in commercial mortgages, ending the year with balances of more than £600m, an increase of 19%. This includes completions of over £200m and a retention rate of maturing loans of 43%. During the year, Atom further automated commercial mortgage loan origination, reducing the time from loan application to securing an Agreement in Principle by 94%, down to just one working day by the end of March 23.
Atom continues to drive value into the UK savings market, with its fixed rate and instant access savings products offering customers highly competitive rates throughout the year. With an interest rate deposit beta of 88%, the bank has outperformed major high street lenders and building societies in offering better deals for savings customers.
The bank remains committed to making a positive impact on the environment and its local community. It has a long-term target of being carbon positive by 2035 and achieved a 12% reduction in operational carbon emissions per full-time employee in FY24. Atom has continued its social investment strategy in the North East, funding two new Women in Technology scholarships at Durham University and launching the Atom Futures Fund to support year 13 students from low-income backgrounds in County Durham applying to Russell Group Universities.
Mark Mullen, chief executive officer at Atom, said: “This has been our best year yet at Atom bank. We have achieved profitability across all measures, grown our loan book significantly, maintained robust credit quality, avoided fraud losses altogether, kept our costs tightly controlled and enhanced our already industry-leading customer experience metrics.
“We begin the new year with tailwinds in the form of strong asset pipelines, excellent technology, a highly engaged team, supportive investors and an enviable reputation with customers. Beyond the confines of banking, we have exciting plans to further reduce our impact on the planet and to create even more opportunities in our local community.
“UK banking remains dominated by players with low growth, high costs and indifferent customer service. We remain entirely focused on serving the needs of borrowers and savers, without the soaring costs and operational complexity of transactional banking products like current accounts. Ultimately, this is the only way to disrupt the status quo.”
