Atom Bank positioned to achieve first yearly profit
The UK’s first digital-only bank and GCV portfolio company, Atom Bank, looks poised to achieve its first year of annual profit this year following a number of encouraging financial indicators.
Following the previous three quarters that recorded consistent operating profits, and statutory tax losses narrowing to £14.5 million in the 12 months to the end of March (from £62.3 million a year earlier), Atom chief executive officer, Mark Mullen, suggested the company was on course to announce its first annual profit.
This recent update comes as an encouraging growth indicator for investors into the bank and is further to the positive news in May that reported Atom were in talks with a New York-based SPAC (Special Purpose Acquisition Vehicle). The blank-cheque acquisition company was founded by Wilbur Ross (previously President Trump’s commerce secretary) and would result in Atom joining the New York stock market,.
Mullen previously stated that Atom’s ambition was to list on the stock market in 2023, and although following a challenging period for many in the banking sector, was ultimately still focused on achieving said goal when he was asked if it remained a focus, saying: “I would love to say yes, but how could I credibly say yes given what’s happening in the world at the moment. We will continue to plan for a listing next year but be realistic about the state of markets.”
Launched in 2016, Atom now has 123,000 registered customers. The Bank’s loan book had risen to £3.3 billion as of the end of March, an increase from £2.7 billion the previous year, and in its most recent fundraising in February of this year was valued at £435 million. Atom has grown its team to a 470-strong workforce in the company’s County Durham-based HQ, and has made national headlines with innovations including its pioneering of the four-day working week - being the largest company in the UK to employ the initiative.
CEO, Mullen, has also been praised for his proactive and positive approach to increasing savings accounts’ interest rates above the minimum required rate (following the Bank of England’s base rate increase to 1.25% and Atom’s subsequent increase to 1.35%) at a time where many incumbents have not passed on base rate rises to their customers. Mullen commented: “They don’t have to, as far as they’re concerned,” he said of the incumbent banks. “Their customers won’t leave.”
This combination of considerable long term growth and positive socioeconomic impact stands testament to the vision and ability of the Atom team, and is a textbook example of the type of qualities and results we at GCV seek in our portfolio companies, and those of which our investors have the opportunity to support.
Having been delighted to support Atom Bank with two rounds of investments in their formative years, the full team at Growth Capital Ventures are delighted to witness the positive mission the Atom team continue to embark on, and offer the company the very best wishes for this next exciting stage of growth.