Atom bank, UK’s first app-based bank, delivers first annual operating profit of £4m since operations launched in April 2016

Atom bank has hit has hit a significant milestone in reaching its first ever annual operating profit of £4m (1) (FY22: £2m loss) „despite a volatile economic backdrop, as it focuses on delivering speed, ease and better value for its customers”, according to the press release.

Customer numbers almost doubling to 224,000 during the period (FY22: 123,000).

„Atom’s impressive growth has not come at the expense of the customer, with this year being the first time the bank has achieved the triple crown of 5-star ratings on both the IOS and Android App Stores, and on Trustpilot, whilst consistently delivering Net Promoter Scores (NPS) in the high 80s.” the company says.

Low-cost model works

Atom remains focused on developing its business model efficiency as a core differentiator in the market. In time this will become a real game changer, exposing the operational costs and inefficiency of the legacy banks. This focus on cost and efficiency already has tangible benefits for customers; Atom’s mortgage application-to-offer time of less than 5 days during the final quarter compares to an average of 23 days for the industry.

Customer net interest margin (NIM) remained strong at 2.84% (FY22: 2.93%), and net interest income (NII) increased by 62% to £76m (FY22: £47m) off the back of strong and profitable balance sheet growth. Total operating costs rose to £59m (FY22: £51m), as the Bank continued to invest in its people and capabilities, but this was hugely outstripped by revenue growth (62%) highlighting the scalability of the operating model.

Atom has now achieved three consecutive quarters of double digit return on tangible equity (ROTE) to the end of Q1 FY24. Current quarterly run-rate is generating +£100m of annualised NII and +£25m of operating profit.

Mark Mullen, Chief Executive Officer at Atom, said: “It has been an important year for Atom. We’ve grown strongly, kept our costs tight and delivered our first annual operating profit. We’ve also passed on more than 70% of the Bank of England’s base rate increases to our savers but only 70% of them to our Standard Variable Rate mortgage borrowers. And we’ve done it while maintaining our 5-star Trustpilot and App Store ratings.

“Over the course of the year Atom has shown that banks can provide exceptional customer service and offer customers better value for money. We never allow ourselves to forget that ultimately, the customer pays for everything.

“We believe that the lowest cost wins. Lowest cost and highest quality wins every time. If that isn’t the new banking paradigm, then it ought to be.”

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¹Year to 31st March 2023

Atom bank is the UK’s first app-based bank. The bank launched operations in April 2016, and offers mortgages and savings through its app, alongside secured business lending for small and medium-sized enterprises.