Atom Bank joins the neobank profitability club with £4m annual profit

The UK’s first digital bank Atom Bank has reported its first annual profit just under ten years since its launch.

Atom made £4m in profits for the period up to 31 March 2023, swinging out of the red for the first time. Last year it reported a £2m loss for the previous 12 months. 

Swelling costs, which rose to £59m (from £51m in 2022), were offset by a 62 per cent surge in revenues.

Savings deposits more than doubled over the course of the twelve-month period to £6.6bn enabling Atom’s net interest income to leap along with rising interest rates.

Net interest income increased by 62 per cent - the same figure as its revenue growth -  to £76m, compared with £47m twelve months ago.

At its current quarterly run-rate, Atom says it is generating more than £100m of annualised net interest income and more than £25m of operating profit.

Founded in 2013, Durham-based Atom joins a swelling group of neobanks announcing full or partial profitability this year including Starling Bank, Monzo, Revolut and Tandem.

Customer numbers doubled too, to 224,000. While the figure is markedly lower than the millions of accounts claimed by its rivals, the bank says its operational efficiency-focused business model is an important differentiator.

“It has been an important year for Atom.  “We’ve grown strongly, kept our costs tight and delivered our first annual operating profit,” said  Mark Mullen, Chief Executive Officer at Atom.

“Over the course of the year Atom has shown that banks can provide exceptional customer service and offer customers better value for money.  We never allow ourselves to forget that ultimately, the customer pays for everything,” he added.  

The period of Atom’s new-found profitability also covers its four-day workweek pilot, which became permanent across the company at the end of 2022.