FinTech: U.K.-Based Atom Bank To Raise £40M To Become Profitable, Go Public

February 26, 2021 | FinTech, News
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The digital bank will raise the funds from its existing shareholders.

Atom Bank, which is based in Durham, U.K., plans to raise £40 million from its existing shareholders in a move to achieve profitability within a year. The digital bank also plans to make an IPO during the financial year 2022/23. (CROWDFUND INSIDER)

Atom on a solid growth path

Atom announced it had added £362 million of mortgages in the second half of its current financial year 2020/21 to end on March 31. On an aggregate basis, the fintech has loaned mortgages worth £2.8 billion since its launch. Last year, it conducted a £775m prime mortgage securitization.

In its other line of lending to businesses, Atom expects to triple its loans to SMEs over the last 12 months. By March 2021, these loans will likely be as much as £700m on Atom’s balance sheet. By that date, Atom also expects to earn a Net Interest Margin of 100 bps on its lending.

Last September the bank launched its Instant Saver product to very favorable reviews. To date, Instant Saver balances are at £0.6 billion. That’s on top of the bank’s existing fixed-rate deposits of £1.7 billion.

On the technology front, the bank also completed a transformation to real-time cloud-native technology across all of Atom’s technology stack last year.

Operating costs on a leash

The bank said it had been able to achieve the above growth metrics and technology advances keeping its operating costs flat.

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.”

“We turn to our shareholders for capital as and when we need it to drive growth,” he added. “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.”

IPO

Mullen said Atom will launch its IPO at an opportune time but “we’re looking at the financial year 2022/23 as our IPO target.”

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Image Credit: Atom Bank’s HQ                                                 

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