Atom bank has announced its strongest financial results so far in its history, with a substantial increase in lending while costs remained low.
Operating profit grew to £27m, a 600% increase on last year, with costs up just 4%.
Atom delivered its first year of operating profit in 2023, and has continued to build on this, now delivering its first full year of profit both before and after tax.
Atom raised £100m from existing investors in November last year, and the additional capital has been used to accelerate balance sheet growth and to further scale the business.
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% (FY23: 2.8%). The size of Atom’s loan book increased by 39% to £4.1bn. A key element was the growth in residential mortgage balances to £3.2bn, an increase of 55%. It delivered residential mortgage completions of almost £1.6bn – a 20% increase, in a market that contracted by 25%. Despite the growth in mortgages, Atom maintains very close control over credit quality,
Atom ended the year with just 0.3% of residential loans in arrears or subject to forbearance measures. This figure is 0.7% across the whole portfolio, including business lending.
The bank 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% (FY23: 5%).
Mark Mullen, CEO at Atom bank, 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.”