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Atom Bank swings into profit as mortgage lending rises 20%

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  • 18/06/2024
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Atom Bank swings into profit as mortgage lending rises 20%
Atom Bank recorded gross mortgage lending of £1.6bn in its latest full-year results, a rise of 20% year-on-year, while delivering its first period of profitability.

Profit before tax for the year ending on 31 March 2024 climbed to £6.7m, swinging from a £10.1m loss the year before.

The bank’s operating profit rose 600% to £27m, while costs nudged up by 4%, which Atom said demonstrated “the success of its efficient, sustainable and scalable business model”.

The digital bank’s overall loan book increased by 39%, pushing the value up to £4.1bn. Atom’s strong loan book and revenue growth drove a 31% increase in its net interest income (NII) to £100m, while its net interest margin (NIM) remained stable year-on-year at 2.8%.

Residential mortgage balances grew to £3.2bn, an increase of 55%, while the lender’s average application-to-offer time stood at four days, against a market average of 11 days, across the residential mortgage range up to 95% LTV.

Atom has maintained close control over credit quality, ending the year with 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% compared to 5% in the previous year.

Atom raised £100m from existing investors in November last year. The additional capital has been used to accelerate balance sheet growth and to further scale the business.

Mark Mullen (pictured), chief executive at Atom, said: “This has been our best year yet at Atom Bank.

“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.”

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