Atom bank, the Durham based Fintech, has made significant progress in the first quarter of its 2022 financial year passing several important income milestones. The Q1 results vindicate Atom’s business model and support a strong trajectory towards sustainable profitability.

During the 3 months April to June 2021, Atom reached £3bn of mortgage completions, passed £1bn of deposits into its Instant Saver product, grew total customer deposits 16% to £2.5bn and delivered its first month of operating profit.

Atom has placed particular emphasis on supporting SMEs as the country exits lockdown and saw strong demand for CBILS products, which drove quarterly growth of 16% in Business lending taking it to a total of £759m. Coupled with 9% growth in the bank’s residential mortgages, Atom’s income from lending is on track to support its targeted return on equity of +24%.

Margins and returns on lending remain strong. Quarter-end net interest margin is at 1.30%, up from 1.02% at the last quarter-end. Atom’s well established credentials in the mortgage market have been further enhanced by the bank’s launch of a range of mortgages for customers with near-perfect credit.

Strong cost control and an improving credit outlook together with a one-off gain from its liquid asset portfolio have enabled Atom to record an operating profit for the month of June. With the build of the bank infrastructure complete, further asset growth will allow it to exploit its embedded cost leverage opportunity. These results further strengthen Atom’s confidence that it will be generating month-on-month operating profit later this year.

Atom’s excellent reputation amongst its customers has also endured. Atom’s customers give the bank a TrustPilot rating of 4.6 stars out of 5 and a recent survey of Atom’s business lending customers confirmed a Net Promoter Score for this key group of +88, reflecting the support Atom has provide to SMEs during lockdown and the service provided to those who need to borrow to grow their businesses.

Mark Mullen, Chief Executive Officer at Atom, said:

“We have momentum - it’s been an outstanding quarter for Atom. We have achieved several important milestones and continued to drive the grow of our savings and loans. We have also maintained our reputation for exceptional service - a key focus for us in ehat remains a challenging time for our customers, our people and the country as a whole.

“We will continue to provide our customers with simple, transparent and competitively priced products and support them with an outstanding service experience. Atom achieved a monthly operating profit for the first time in the company’s history and we’re determined to accelerate further and faster both this year and next as we continue our journey towards sustainable profitability and IPO”.‍

Significant momentum after a challenging period:‍

• Several key milestones reached:
  - £3bn of mortgage completions; with growth focussed on higher (>85%) LTV and margin origination.
  - £1bn of deposits into Atom’s Instant Saver product, while total customer deposits have grown by 16% to £2.5bn.
  - Made the 1,000th secured loan to an SME customer.
  - Atom’s first month of operating profit.

• Net interest income has increased 30% in the quarter to £9.8m (+60% annualised growth to FY21) with strong growth in both the mortgage and business bank lending portfolios.
• Launch of near-perfect credit mortgage range in June.
• Net interest margin has increased to 1.30%, up from 1.02% at the last quarter.
• Capital position strengthened, with a CET1 ratio of 17.6%, up from 15.3%.
• Quarterly operating costs down to £12.3m with tight control as operations continue to scale.
• Exceptionally high levels of customer satisfaction, with a business Net Promoter Score of +88, and a TrustPilot rating of 4.6/5.
• These results reinforce Atom’s expectation of generating sustainable, month-on-month operating profit this year.