The lender, which launched in 2016 offering fixed rate residential mortgage products through brokers, outlined its aims to grow the non-advised channel in its annual report for the year to end of April 2021.
The report showed Atom generated new originations of £336m in the period from late 2020 to April 2021, after a return to lending following a halt from March to October 2020 owing to the Covid-19 crisis.
The mortgage portfolio reduced by £700m to £1bn during the year, a result of selling a tranche of mortgage loans in a securitisation transaction with its subsidiary Elvet Mortgages.
The transaction de-recognised £764m of mortgage loans from the bank’s balance sheet, thereby reducing the capital requirement on them and “allowing these resources to be redeployed to support assets with higher yield characteristics,” the report said. Atom booked a loss of £10m on the sale during the year.
Mark Mullen, chief executive officer, said: “We returned strongly to residential mortgage lending where spreads have made a dramatic and, for now, sustained recovery, from the lows of 2019.”
“Later this year, we will implement. . . our near-prime mortgage offer and our execution-only mortgage beta,” he said.
The bank further outlined a vision “to expand product range and to enhance automated origination and servicing.
“We are developing tools to support a non-advised mortgage sales journey,” it said.
Atom made an underlying loss of £36m during the year, down from £46m in the year to end of April 2020. Net interest margin (NIM) was 54 basis points (bps), an improvement on eight bps in 2020. The lender noted NIM of 114 bps during March 2021.
“While we continue to be loss-making, the dynamics of the business have been transformed and we have developed strong momentum toward reaching breakeven on a monthly run rate during 2022,” Mullen added.
Atom has previously reported new lending of £100m for the first quarter of its current financial year, in April to June 2021.