Record business lending helps Atom Bank reach ‘cusp’ of full-year profits

A challenger bank stands “on the cusp” of securing its first full-year profits after record-breaking business lending was matched by strong residential demand.

Atom Bank says it has made “remarkable progress” as the commercial environment seeks to make post-lockdown progress and homebuyers want to climb the ladder.

According to latest results, the Durham-based lender – which has no high street branches – made its first monthly operating profit in the first quarter of the 2022 financial year, which it followed with three further consecutive quarters of growth to March 31.

Income grew by more than 200 per cent, with underlying operating losses narrowing to £2 million – which bosses say marks a £34 million improvement on the previous year.

Its growth was bolstered by a rise in the value of its total loan book, which increased from £2.7 billion in 2021 to £3.3 billion.

Leading the push was the bank’s business lending, which hit a record £1 billion, with the lender having taken part in the Government’s CBILS scheme.

Residential mortgage lending rose to £1.5 billion.

Across the lender’s savings platforms, balances in its Instant Access Saver increased to £1.3 billion, with total deposit balances at year end standing £1 billion higher at £3.2 billion.

Mark Mullen, chief executive, said: “It has been a significant year of progress.

“We have continued to grow our franchise and we’re on the cusp of achieving sustainable full-year profitability, proving 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.”

He added: “We continue to offer customers a better deal, with exceptional service, because that 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.

“While 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.”