Atom Bank still eyeing 2022 profitability despite posting £36m operating loss

Digital banks have long been eyeing ever-elusive profitability and, according to Atom Bank’s latest results, it still looks set to reach the milestone in 2022 ahead of its planned IPO.

Losses at the bank shrank to an operating loss of £36m in the year up to 31 March, down from £46m in the same period in 2020.

The digital bank turned its first operating profit earlier this year thanks to its £3bn mortgage lending portfolio and claims it is still on track to reach monthly break-even during 2022.

“Atom has momentum, in recent years we have invested significantly in the business and now we’re seeing the results,” Atom Bank’s CEO Mark Mullen said.

Our losses are shrinking and we achieved our first monthly operating profit in June of 202.  We’re confident that we will deliver sustainable profitability in the weeks and months ahead as we continue our journey to IPO”. 

A focus on supporting SMEs through the Covid-19 pandemic saw business lending increase from £240m to £662m, with the bank on track to have provided £1bn in lending to SMEs by September 2021.

Atom’s strong SME lending was largely down to the bank being accredited to the Coronavirus Business Interruption Loan Scheme (CBILS) in 2020.

The digital bank also recently partnered with Funding Circle to deploy a further £300m to cash-strapped SMEs across the UK.

Alongside the bank’s strong lending portfolio, its new savings products also helped it weather the Covid-19-related storm.

The digital challenger opened its newest savings product, the Instant Saver account, to the public in September last year and has already seen deposits reach £1bn, adding to the £1.7bn held in its fixed savings rate accounts.