In a landmark achievement, Atom Bank has posted its first pre-tax profit, driven by a robust 40% increase in its loan book, which now stands at £4.1 billion. This impressive growth includes a 55% surge in residential mortgage balances, reaching £3.2 billion.
The UK digital bank has joined the ranks of peers like Monzo and Starling in achieving profitability, a notable feat as the funding landscape shifts, pushing these challengers to refine their business models for sustained success.
Atom Bank, despite not offering current accounts, has thrived by leveraging high interest rates and attractive savings products. The bank boasts retail savings balances exceeding £5.7 billion, funded by a quarter of a million customers. For the fiscal year 2024, the Durham-based lender reported a pre-tax profit of £7 million, a sharp turnaround from a £10 million loss the previous year. Operating profit surged by an astounding 600% year-on-year to £27 million.
CEO Mark Mullen expressed optimism: “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. The change in sentiment regarding the interest rate outlook will create new pressure on spreads which we will need to monitor closely. In the year ahead it’s likely that we will very carefully balance growth with profitability.”
Looking ahead, Atom Bank is also considering an IPO. Mullen told CityAM: “I don’t want to be hostage to it. We still have a way to go to get bigger. One year’s full profit is great, but give us another one. Let’s demonstrate to our investors that this is not an interest rate trick and we’ve created an actual sustainable business.”
For more insights into Atom Bank’s journey and future plans, visit Atom Bank.
