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Atom hits profit as resi mortgage balance sheet grows to £1.5bn

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  • 18/07/2022
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The app-only bank grew its residential mortgage assets to £1.5bn during the year ending March 2022, as it recorded its first operating profit.

Atom bank said it had expanded its residential lending assets to include near-prime retail mortgages and grew its on-balance sheet residential mortgage book from £1bn the previous year.

The lender also recorded its first month of operating profit during its first quarter, and said it had recorded operating profits for the remaining three quarters of the year ending 31 March 2022.

Atom’s pre-tax losses narrowed to £14.5m from £62.3m a year earlier while its net interest margin (NIM) rose to 127bp, compared to 54bps in 2021, driven by lending growth across its residential and business portfolio.

Income during the year grew 200 per cent while operating costs rose six per cent.

The growth in income was attributed to increases in the loan book across both business and residential lending, with Atom’s total loan book totalling £3.3bn, up from £2.7bn  the previous year.

Atom’s business lending grew to £1bn, from £0.7bn the previous year, having participated in the government’s coronavirus business interruption scheme (CBILS).

The bank said that to date, all business lending had been fraud-free and achieved with a business customer Net Promoter Score of +88.

Atom’s introduction of a four-day week with no loss of pay in November 2021 had so far been a resounding success.

It said that six months on, employees were reporting being happier and healthier, with increased employee engagement and decreased sickness and attrition levels. Customer satisfaction had also increased since the change, with Atom’s Trustpilot score hitting 4.7/5.0 this year (2021: 4.6/5.0), and Net Promoter Score reaching +87 (2021: 76).

Atom also engaged Alectro, an independent carbon emissions expert, to review the emissions that Atom created and was responsible for in 2021.  This included all scope one direct emissions, as well as scope two and three indirect emissions, including the impact that its suppliers have.

The review reported a total emissions level equivalent to 1.09t Co2e per  full-time employee for 2021. Atom said this level of emissions was very low compared to other banks

Mark Mullen, chief executive officer at Atom, said: “It has been a significant year of progress for Atom. We have continued to grow our franchise and we’re on the cusp of achieving sustainable full-year profitability, proving that it is possible to do so while providing both customers and employees with a better deal. Banks are taking advantage of interest rate rises to widen their margins. They are not passing on increases in rates to savers, but more recently they have started to increase the cost of borrowing.

“With a cost-of-living crisis looming large, it’s disappointing, but hardly surprising, to see high street banks behave this way. It gives truth to the old adage that a banker is someone who gives you an umbrella when the sun is shining but takes it away when it starts to rain.

“Atom continues to offer customers a better deal, with exceptional service, because that, we feel, is the right thing to do. We are here to make the experience of borrowing and saving simpler, faster and better value than anyone else. In the last 12 months we have made remarkable progress on our journey toward realising that ambition.

“Whilst it might have been unfashionable at some point to focus on the fundamentals of banking and the relationship between savers and borrowers, we think there has never been a more important time to play the role of a responsible lender. As we all search for growth and support those who invest to grow, there is a key role for banks to play; after all, leverage makes the world go round.”

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