February 25, 2021 @ 10:00 by Richard Dawson
A North East challenger bank is to raise £40 million from existing shareholders as it moves to profitability and eyes an initial public offering (IPO) in the financial year 2022/23.
Atom Bank’s revenues have grown strongly through its mortgage and business lending schemes, with the company on course to achieve 100 basis points of net interest margin (NIM) by the end of March 2021.
Atom will have grown lending to SMEs on its balance sheet to more than £700 million by the end of this financial year, a tripling of business loans in the last 12 months.
Its mortgage portfolio also saw £362 million added in the second half of the financial year 2020/21.
To date, Atom Bank has loaned £2.8 billion to UK mortgage customers.
The Durham-based lender also recently confirmed its place in the secondary markets for UK mortgages, issuing £775 million of prime mortgage securitisation last year.
Other highlights include the launch of a new instant saver last September to very strong reviews, with £0.6 billion of instant saver balances added to its existing £1.7 billion of fixed rate savings.
Atom’s automated mortgage journey is rated 9.2/10 via Reevoo and over the last year the bank’s app has scored 4.7 on the iOS store and 4.5 on the Google Play store.
Atom has a Trustpilot rating of 4.6/5 and its latest Net Promoter Score was +79.
Mark Mullen, Chief Executive Officer at Atom said: “We think of Atom as an exceptionally engaging and efficient banking machine that helps and supports customers to own their homes or build their businesses.
“We’ve been there for new and existing customers during the pandemic, and in a year when we have held our operating costs constant I’m delighted that we have coupled substantial income growth with an enviable record of customer experience.”
Asked about the future and the possibility of an IPO for Atom, Mark added: “We turn to our shareholders for capital as and when we need it to drive growth.
“Despite it being a difficult environment for all companies that need to raise funding, this capital raise will allow us to continue to progress towards profitability and ever-improving levels of efficiency and engagement.
“The team retains an IPO as our objective, and we’ll take the business there when we and the markets are ready.
“After the year that’s just gone, I’m not going to claim perfect foresight, but we’re looking at the financial year 2022/23 as our IPO target.”