The Atom FY 2019 earnings disclose another challenging year for the UK’s first digital bank.
Atom Bank FY 2019 losses rise by 52% to £80.2m for the 12 months to end Marc h from £52.6m.
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Atom says that this derives partly from delaying the launch of new products pending deployment of a new banking platform. That the bank is implementing a new platform so soon after its 2015 launch inevitably delays Atom’s progress.
Says Atom Bank CEO Mark Mullen: “it also reflects very challenging market conditions.”
He adds: “We have taken steps to ensure we focus our product mix, resources and capital on profitable growth opportunities.”
The bank continues to suffer from margin pressure, in particular in the mortgage sector.
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By GlobalDataAtom Bank FY 2019 results disclose that it posts net interest expense of £2m. This is at least an improvement from net interest expense of £5m in fiscal 2018. Moreover, Mullen says that Atom has achieved positive net interest income so far in fiscal year 2020.
Atom Bank FY 2019 highlights
Total assets rise by 40% year-over –year to £2.8bn with loans and advances doubling to £2.4bn. At the same time mortgage balances doubled to £2.2bn from £1.1bn in fiscal 2018.
Deposit growth is more modest with deposits up 23% y-o-y to £1.77bn from a year ago. Other highlights include a net promoter score of +76 for Atom. Meantime its mortgage broker posts a NPS of +70.
Atom is also successfully limiting growth in expenses as the bank grows. Operating costs in fiscal 2019 rise by 10% to £43m.
Atom raised another £50m in funding in July from investors including largest shareholder BBVA. Other backers include beleaguered fund manager Neil Woodford via his Patient Capital Trust.
The latest fundraising brings total funds raised by Atom to around £450m. BBVA has a current shareholding in Atom of around 39%. Toscafund and Woodford hold around 30% and 18% respectively.
